The euro's strength against the dollar has diminished Germany's export vitality but domestic demand is picking up and the economy is in good health overall, the Finance Ministry said on Thursday.
The euro rose against the dollar from early this year until late April, before easing slightly. The rise coincided with weaker German exports, which fell by 1.2 percent in the first quarter of this year after powering growth in 2006. In the first five months of this year, the tax take in Europe's largest economy rose by 14.2 percent on the year.
Germany's public-sector deficit narrowed to 1.6 percent of GDP last year, dipping below the European Union's 3 percent limit for the first time since 2001. A finance ministry paper published on Wednesday showed the deficit is set to shrink to around 0.5 percent of GDP this year.
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