Germany to owe less debt than expected: budget officials

12:32, June 23, 2010      

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The German government would face a lower deficit in next two years and borrow less money than expected, as the country has a rebounding economy and higher tax revenues, German newspapers reported Tuesday.

German well-known daily Sddeutsche Zeitung and Bild both quoted government budget officials as saying that the German government is expected to borrow 20 billion euros (25 billion dollars) less for its federal budget this year, and the deficit could be around 60 billion to 65 billion euros.

The government earlier predicted that the federal budget deficit would total 86 billion euros this year, accounting for nearly 6 percent of the gross domestic production (GDP).

German budget officials said that the country's economy has regained vigor since March after a long, cold winter, with exports rising sharply and labor market cost staying low, therefore the corporate tax revenues were much higher than expected.

Moreover, the added income from the auction of fourth generation mobile phone network licenses to telecommunication giants also offset some planned borrowing.

In 2011, Germany's net borrowing on federal level would be reduced to 55 billion euros, far below previous projections of nearly 72 billion euros, officials said.

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