Germany May Borrow Less Than Planned in 2020, FAS Reports
German’s government will likely take on less additional debt this year than was last budgeted despite increased spending to support the economy during the pandemic, Frankfurter Allgemeine Sonntagszeitung reported.
“We will probably not exhaust the planned new debt of 217 billion euros ($257 billion) for 2020,” Finance Ministry official Werner Gatzer told the newspaper. “We’ll soon see exactly how much we need.”
Germany has ramped up spending in the wake of the pandemic after several years of running budget surpluses left the government with ample firepower to help companies and workers hit by restrictions aimed at curbing the outbreak.
The Parliament passed a second budget amendment in July that penciled in higher debt issuance. Yet the funding for economic aid and loan guarantees is far from being used up, according to the newspaper.
Support efforts are paying off, Finance Minister Olaf Scholz said earlier this week, as Germany raised its forecasts for tax revenue this year and next.
New virus restrictions imposed earlier this month in response to the second wave of the pandemic still mean more spending. Germany expects to pay out 22 billion euros in coronavirus relief aid to companies and self-employed in the first half of 2021, Reuters reported on Saturday, citing sources it didn’t identify.
©2020 Bloomberg L.P.