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German budget deficit drops to 2.5%

Published 24 August 2006 - Updated 19 February 2007
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According to figures presented by the German government, the country is likely to conform to Stability Pact rules for the first time since 2002.

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.

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