German Deficit to Breach EU Levels Again

Germany will be breaching the EU limit of a 3 percent public deficit for the fourth year in a row, the Financial Times Deutschland reported on Wednesday. The International Monetary Fund (IMF) expects the German public deficit to reach 3.6 percent of gross domestic product in 2005, the newspaper said quoting IMF's latest economic report, scheduled to be released in mid-April. IMF has also halved its growth forecast for the eurozone's biggest economy for 2005 to 0.8 percent and lowered the growth forecast for the 12-country eurozone to 1.6 percent. Germany and the eurozone would therefore lag far behind global growth, which was expected to remain "relatively robust", the business daily Handelsblatt reported, quoting extracts from the same IMF report. The fund was pencilling in global growth of 4.3 percent in 2005 and 4.4 percent in 2006 after 5.0 percent in 2004. The United States would remain the locomotive of the world economy, chalking up anticipated growth of 3.7 percent both this year and next year after 4.4 percent last year.