June 15, 2020 / 1:42 PM / 25 days ago

Germany's debt plans create budget deficit of 7.25% this year: sources

BERLIN (Reuters) - German Finance Minister Olaf Scholz will ask parliament to increase new borrowing by 62.5 billion euros to 218.5 billion euros this year to finance stimulus measures in the coronavirus pandemic, two people familiar with the plans said on Monday.

The step will push Germany’s debt-to-GDP ratio to around 77% in 2020 from just below 60% in 2019 and the finance ministry expects the public sector’s overall budget deficit to reach 7.25% of economic output this year, the two officials said on condition of anonymity.

The comments come after a Reuters report on Wednesday in which a senior official said that Germany’s overall new borrowing would probably balloon beyond 200 billion euros this year.

Reporting by Michael Nienaber; editing by Thomas Seythal

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