German deficit doubled in early 2010: statistics

24th August 2010, Comments 0 comments

Germany's public deficit doubled in the first half of the year from the same period in 2009 despite strong growth but is still close to EU limits, official data showed on Tuesday.

The biggest European economy recorded a public deficit of 42.8 billion euros (54 billion dollars) in the six-month period, up from 18.7 billion in the first half of 2009, the Destatis statistics office said in a statement.

At constant prices, that represents 3.5 percent of gross domestic product (GDP), it added, above the European Union's Stability and Growth Pact limit of 3.0 percent.

"With some time lag, the impact of the economic and financial crisis and of the relevant government measures taken to support the economy and the financial markets is clearly reflected now in the budgets of the central, state and local government as well as the social security funds," Destatis said.

Like many countries, Germany ran up its deficit with stimulus measures approved last year that were aimed at battling its worst economic recession since World War II.

Destatis confirmed meanwhile that the economy expanded by 2.2 percent in the second quarter of 2010 from the previous three-month period, the strongest rate of growth since east and west Germany were reunited in late 1990.

Officials in Berlin plan to bring the deficit back below 3.0 percent of output by 2012 with help from an austerity plan that aims to save 80 billion euros by 2014.

Germany has been criticised by some EU leaders for focusing on reducing the deficit however while others within the 16-nation eurozone struggle to generate sustained economic growth.

© 2010 AFP

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