Germany sees economy recovering faster than expected in 2020
13:53, 01/09/2020, TuesdayU: Update: 13:56, 01/09/2020, Tuesday
REUTERS
German Economy Minister Peter Altmaier presents the government's updated economic outlook for 2020 in Berlin, Germany, September 1, 2020. REUTERS/Hannibal Hanschke
SUSPENDING DEBT LIMITS
The revised forecasts will form the basis of tax revenue estimates, which the finance ministry is expected to update next week. This will be followed by Finance Minister Olaf Scholz's proposal for the federal government's budget in 2021.
Scholz has already said he will ask parliament to suspend constitutionally enshrined debt limits next year so that the government can plan its 2021 budget with new debt as it sees necessary.
Germany's Bundestag lower house of parliament already suspended the debt limit in March and June to allow the government to record new debt of 217.8 billion euros this year.
The government has launched an unprecedented array of rescue and stimulus measures since March to shield companies and consumers from the initial impact of the pandemic and help them recover as quickly as possible.
The economy contracted by a record 9.7% in the second quarter as consumer spending, company investment and exports all collapsed.
Still, Germany fared better than some other euro zone economies. The French economy contracted by 13.8% quarter-on-quarter in the April-June period and Italy's shrank by 12.8%.