German government deficit to hit 4.5% in 2023 – Spiegel

BERLIN (Reuters) – The German government’s public deficit will be significantly higher in 2023 than previously thought, reaching 4.5%, due mainly to energy relief measures, the Spiegel news magazine reported on Friday, citing finance ministry documents.

A deficit of 4.5% of gross domestic product (GDP) is more than double the amount originally calculated, according to Spiegel.

The deficit should drop to 2% in 2024 and then to 1.5% in 2025 and 2026, as state aid becomes limited and expires over the course of 2024 under current government plans, Spiegel reported.

A finance ministry source would not comment on the Spiegel report but said it was clear that the relief measures would be reflected in the government’s overall fiscal balance.

The deficit is expected to decline accordingly after the measures expire from 2024, according to the source.

(Writing by Miranda Murray, editing by Rachel More)