Germany's Finance Ministry Lowers Public Deficit Forecasts

BERLIN (MNI) - The German Finance Ministry expects to meet the

deficit limit of 3% of GDP set under the EU Stability and Growth

Pact already by 2012, the Ministry said Thursday. Mainly due to

the better federal revenue expectations and the planned budget

consolidation measures of the federal government, the Ministry

lowered its forecasts for the country's total public deficit. It

now predicts a deficit of 4.5% of GDP in 2010, of 4% in 2011, 3%

in 2012, 2% in 2013 and 1.5% in 2014. Total public debt is now

seen by the Ministry at 78% of GDP in 2010, 80% in 2011, 80.5%

both in 2012 and 2013 and 80% in 2014. In its Stability Plan

dating from the start of the year, the government had forecast a

public deficit of 5.5% of GDP in 2010, 4.5% in 2011, 3.5% in 2012

and 3% in 2013. Public debt was estimated at 76.5% of GDP in

2010, 79.5% in 2011, 81% in 2012 and 82% in 2013. In its new

projections, the Ministry now tables a federal deficit of E65

billion in 2010, E58 billion in 2011, E40.5 billion in 2012, E32

billion in 2013 and E24.5 billion in 2014. For the special funds

administered outside of the regular federal budget, the Ministry

expects a deficit of E9.5 billion in 2010 and E5 billion in 2011.

Thereafter, it forecasts the special funds to post surpluses of

E4 billion in 2012, E3 billion in 2013 and E4.5 billion in 2014.

The aggregate deficit of the 16 states is projected by the

Ministry at E30 billion in 2010, E32 billion in 2011, E27 billion

in 2012, E23 billion in 2013 and E20 billion in 2014. For the

local governments the Ministry forecasts an aggregate budget

deficit of E14 billion in 2010, E15.5 billion in 2011, E12.5

billion in 2012, E10 billion in 2013 and E8 billion in 2014.

--Berlin bureau: +49-30-22 62 05 80; email:

twidder@marketnews.com