German govt deficit to hit 4.5pc in 2023

BERLIN: The German government’s public deficit will be significantly higher in 2023 than previously thought, reaching 4.5%, due mainly to energy relief measures, the Spiegel news magazine reported on Friday, citing finance ministry documents.

A deficit of 4.5% of gross domestic product (GDP) is more than double the amount originally calculated, according to Spiegel.

The deficit should drop to 2% in 2024 and then to 1.5% in 2025 and 2026, as state aid becomes limited and expires over the course of 2024 under current government plans, Spiegel reported.

A finance ministry source would not comment on the Spiegel report but said it was clear that the relief measures would be reflected in the government’s overall fiscal balance.