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Corona crisis: National deficit for 2020 is significantly smaller than estimated

2021-02-24T08:22:51.621Z


In the corona crisis, the state spends a lot more money than it receives. In 2020, the federal, state, municipal and social security funds fell by 140 billion euros - almost 20 billion less than initially estimated.


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Container ship in the port of Hamburg: higher economic growth meant that national debt grew less strongly than feared

Photo: Markus Scholz / picture alliance / dpa

The German economy grew surprisingly strongly at the end of 2020 - which is also having a positive effect on the state treasury: In the corona crisis year 2020, the deficit in the budgets of the federal, state, municipal and social security funds was around 19 billion euros less than previously assumed.

The bottom line was that revenues were € 139.6 billion below expenditure, announced the Federal Statistical Office.

An initial estimate by the official statisticians in January came to a minus of 158.2 billion euros.

"That was the first deficit since 2011 and the second-highest deficit since German unification, only exceeded by the record deficit of 1995, in which the fiduciary debts were taken over into the state budget," the statisticians say.

One reason for the correction: Europe's largest economy grew faster at the end of 2020 than previously thought.

Despite the lockdown, the gross domestic product increased by 0.3 percent compared to the previous quarter from October to December, after an earlier estimate in January only showed a mini-growth of 0.1 percent.

As a result, the slump in 2020 as a whole, at 4.9 percent, was somewhat smaller than previously indicated at 5.0 percent.

Still, it is the sharpest decline since the 2009 financial crisis.

The deficit in the state budget corresponds to a deficit of 4.2 percent of the gross domestic product.

The European Maastricht rules actually provide for an upper limit of three percent.

"However, the application has been suspended for 2020 and 2021," it said.

The reason for the suspension is the considerable burdens in the course of the corona crisis: short-time work benefits, corona aid, tax losses.

In order to prevent an even more serious recession, the state also countered with massive economic stimulus such as the temporary VAT cut.

Income fell by 3.0 percent to 1,563 billion euros, while expenditure rose by 9.3 percent to 1,702.6 billion euros.

For this year, the federal government expects economic growth of three percent, which should also reduce the deficit in the state treasury.

The pre-crisis level is not expected to be reached again until mid-2022.

Icon: The mirror

fdi / Reuters

Source: spiegel

All business articles on 2021-02-24

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