( AFP ) - The German government cut its forecasted 2007 budget deficit Saturday amid reports of a slightly improved growth forecast for the same year.
A hike in tax receipts explains the improved deficit forecast, trimmed to 14 billion euros (19.85 billion dollars) from the 19.6 billion euros initially predicted, a finance ministry spokesman said.
According to the upcoming Monday edition of Germany's Der Spiegel weekly, this allows Finance Minister Peer Steinbrueck to postpone booking proceeds from privatisations until later years and so cover any slowdown in economic growth.
The ministry's figures reflect only the federal state budget and not the entire German budget which also comprises regional and local budgets, and which has to be under three percent of output according to EU rules. This budget is expected to be nearly balanced this year.
Berlin is also preparing to slightly boost its growth forecast for 2007, from 2.5 percent compared to the current 2.3 percent, thanks to healthy exports and solid third-quarter growth, Der Spiegel reported.
But for 2008 it cuts its forecast to two percent from 2.4 percent.
Steinbrueck is due to present his updated budget to the cabinet on Wednesday. The government is due to publish growth forecasts on October 25.