Germany to surpass budget deficit limit next year

Germany to surpass budget deficit limit next year

Organization for Economic Cooperation and Development (OECD) expects Germany and three other countries to surpass European Union budget deficit limit next year. Therefore, OECD has decreased its forecast of growth rate for Europe's largest economy to 1.2% this year from 1.4%. Germany will probably report a budget deficit of 3.2% of GDP (Gross Domestic Product) in 2005. OECD also expects France, Italy and Portugal to exceed budget deficit limit next year. Italy will have the biggest deficit in the EU with 4.3% of GDP. In addition, European Commission stated that Germany, France, Italy, Netherlands, Portugal and Greece which constitute 80% of the $8.5 trillion EU economy will exceed the budget deficit limit of 3% of GDP this year. Under EU budgetary rules, member countries are obliged to keep their deficits below the 3% of GDP.