Germany cuts its public deficit

22nd February 2005, Comments 0 comments

22 February 2005, WIESBADEN - Germany's public deficit came in at 3.7 percent last year rather than the 3.9 percent suggested in the first estimate released four weeks ago, official statistics released on Tuesday showed. The Federal Statistics Office also released a final 2004 real-growth figure of 1.6 percent for the German economy. The rise in net borrowing by the federal, state and local branches of government breaches the formal limit of 3.0 percent of gross domestic product as set out in the European

22  February 2005

WIESBADEN - Germany's public deficit came in at 3.7 percent last year rather than the 3.9 percent suggested in the first estimate released four weeks ago, official statistics released on Tuesday showed.

The Federal Statistics Office also released a final 2004 real-growth figure of 1.6 percent for the German economy.

The rise in net borrowing by the federal, state and local branches of government breaches the formal limit of 3.0 percent of gross domestic product as set out in the European Union stability pact.

The office in Wiesbaden said net borrowing in 2004 had amounted to EUR 80.3 billion.

They said the figures needed to be revised both because public revenues had been larger than forecast and because federal spending in the fourth quarter had come in at EUR 2.6 billion less than forecast.

Germany's slack growth in 2004, after a year where the economy shrank 0.1 percent, reflects weak consumer demand, with exports the sole expansionary force.

In the third and fourth quarters, exports also fell short, causing the economy to stagnate in the third quarter, then shrink 0.2 percent compared to the matching quarters of 2003.

Employers' leader Dieter Hundt called on German trade unions late on Monday to be moderate in their pay demands in light of the weakness of growth. He said an average 1.5 percent in rises was the maximum.

DPA

Subject: German news

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