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Virus-related hit to Germany's public finances a bit smaller than feared

BERLIN, Nov 12 (Reuters) - The German government expects its tax revenues for 2020 to 2024 to come in 6.7 billion euros ($7.90 billion) higher than previously projected as the coronavirus pandemic hits public finances a bit less than initially feared, a document showed on Thursday.

For all state levels, including state governments as well as municipalities, tax revenues are seen 15.8 billion euros higher than projected in September, according to the document compiled by finance ministry officials and other tax experts.

The main reason for the improvement is the government’s decision in October to revise upwards its estimate for gross domestic product this year. It now expects GDP to shrink by 5.5%, or 5.9% in calendar-adjusted terms.

Finance Minister Olaf Scholz has already said he is working on a budget for next year which would see the government taking on considerably more debt. This will require parliament to suspend debt limits in 2021 for the second time in two years.

Germany has since March implemented an unprecedented array of rescue and stimulus measures, financed with record new borrowing of up to 218 billion euros for which parliament suspended the strict borrowing limits in the constitution. ($1 = 0.8477 euros) (Reporting by Michael Nienaber; Editing by Maria Sheahan)

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