March 16, 2020 / 3:47 PM / 15 days ago

Germany government expects economy to shrink this year due to coronavirus: sources

Empty chairs and tables are seen in front of a restaurant during the spread of the coronavirus disease (COVID-19), in Berlin, Germany, March 16, 2020. REUTERS/Annegret Hilse

BERLIN (Reuters) - The German government expects the economy to shrink this year due to the impact of the coronavirus, government sources said on Monday, adding that the crisis is likely to push tax revenues down and require higher state spending.

The finance ministry will present a provisional budget plan for 2021 and the mid-term financial planning until 2024 on Wednesday, but this will not yet take into account higher state spending on the coronavirus crisis, two senior officials said on condition of anonymity.

The officials added that the finance ministry will present its more formal draft budget in June which will likely include fiscal measures to counter the impact of the coronavirus on Europe’s largest economy.

Reporting by Michael Nienaber and Holger Hansen, editing by Thomas Escritt

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