German deficit found rising in first nine months of the year | Business| Economy and finance news from a German perspective | DW | 27.12.2013
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German deficit found rising in first nine months of the year

Germany's economy has been in a robust state and unemployment has been low throughout the eurozone debt crisis. Nevertheless, the nation's public deficit has been found rising in the first three quarters of this year.

The federal German government, the nation's 16 states and their communities together spent 28.7 billion euros ($39.5 billion) more than they collected in terms of revenues in the first nine months of 2013.

Their deficit thus rose by 5.1 billion euros from the levels logged in the same period a year earlier, the National Statistics Office (Destatis) reported Friday.

The agency said the development could largely be attributed to higher social insurance costs as a special fee for visits to a doctor had been dropped and more money had to be raised for pension hikes.

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German economists were hopeful the situation could be rectified by higher state revenues next year, with the export-oriented nation likely to profit from a further pick-up of the global economy.

But while Germany's medium-term economic outlook was seen to be quite positive, the country ran the risk of losing out to Britain long-term, the UK's Center for Economic and Business Research (CEBR) predicted.

It said Europe's current powerhouse would have a smaller economy than Britain by about 2030 not least because of the potentially negative impact of further eurozone crises, with the UK said to profit from a rising population, a low-tax regime and insulation from the worst of the euro area's protracted problems.

"Theoretically Germany should continue to perform well in future years," the CEBR commented. "But a combination of weak European growth, a depreciating currency and the requirement to bail out bailing economies mean that Germany will eventually slip down the league table."

hg/jlw (dpa, Reuters)

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