German budget deficit drops to 2.5%[de] 

German budget deficit declined from 3.7% last year to 2.5% of GDP in the first half of 2006, thanks to an increase in tax revenue and a general economic pick-up, according to the Federal Statistics Office.

The Federal Bank said it expects Germany to be in line with the stability pact in 2006, the first time since its breach of deficit rules in 2002. The Stability and Growth Pact prescribes public deficit below 3% and a debt ratio of 60% of GDP.