BERLIN, July 15 (Xinhua) -- Germany will slash its budget deficits to below three percent of the gross domestic product (GDP), a maximum limit set by the European Union (EU), in the year 2012 rather than previously expected 2013, the Finance Ministry said Thursday.
The ministry forecast that Germany's deficit is to be 4.5 percent of the4 GDP this year, lower than January's projection of 5.5 percent, as the country's economy regained vigor since March, leading to booming exports and more-than-expected tax revenues.
As the promising economy brings about more tax intakes and less spending on social insurance, Germany, Europe's largest country, will reduce its deficits to four percent of the GDP in 2011 and three percent in 2012, which then meets the EU's deficit target, the ministry said in a statement.
Moreover, the deficit will drop to two percent of the GDP in 2013 and 1.5 percent in 2014, the statement added.
The EU's Growth and Stability Pact has clearly set a limit for eurozone countries's public deficits -- no more than three percent of the GDP, but the rule was not strictly followed by many European countries. Greece reported its budget deficit accounted for 12.7 percent of the GDP in 2009, shocking the European market and aroused debt crisis over the continent.
The German government strongly supports the idea that eurozone partners should firmly take austerity measures to "achieve a sustainable path toward economic growth."