January 30, 2018 / 2:04 PM / 9 months ago

Germany to post public sector surplus this year

BERLIN (Reuters) - Germany will post a budget surplus in 2018 of about 1 percent of output, the economy ministry said in a report seen by Reuters on Tuesday, signalling that the next government will have wiggle room to trim taxes and increase spending.

FILE PHOTO - Fireworks explode in front of the skyline with the financial district and the European Central Bank (ECB, R) during New Year's eve celebrations in Frankfurt, Germany, January 1, 2018. REUTERS/Kai Pfaffenbach

The report, which will be officially presented on Wednesday, also said that Germany’s debt burden will probably fall to below 60 percent of gross domestic product (GDP) - in line with European Union rules.

It also said that Germany’s fiscal policies must be geared to a normalisation of interest rates in the euro zone.

The public sector, which includes the federal government, regional states, municipalities and social funds, posted a record budget surplus of 38.4 billion euros (£33.8 billion) in 2017.

Reporting by Gernot Heller; Writing by Joseph Nasr; Editing by Madeline Chambers

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