German MOF Expects Country To Post A Budget Deficit In 09

BERLIN --Germany's public sector will post a budget deficit next year after a balanced budget this year, according to a document the country's finance ministry has prepared for a meeting with state finance ministers Wednesday.

In its new forecast, the finance ministry predicts the German budget will be balanced this year, as previously forecast, while the budget is likely to reach a deficit of 0.5% of gross domestic product in 2009, compared with its previous forecast of a balanced budget, according to the document seen by Dow Jones Newswires.

Finance Minister Peer Steinbrueck is scheduled to brief the press on the meeting at 1615 GMT Wednesday.

In its medium-term budget plans presented in July, the finance ministry had predicted the budget was likely to reach a small surplus of "+0%" of GDP in 2009, before posting a 0.5% surplus in 2010, and a 1% surplus in both 2011 and 2012.

Wednesday's document provided no new figures for the government's new debt requirement, as lawmakers are due to finalize the 2009 draft budget Thursday.

The draft presented in June eyed EUR10.5 billion in 2009 net new borrowing, but media leaks have suggested the level might be raised to EUR18 billion.

For 2008 budget, the finance ministry's document still expects around EUR12 billion in new debt. The 2008 budget penciled in EUR11.9 billion in new debt.

-By Andrea Thomas, Dow Jones Newswires; +49 30 288 8410; andrea.thomas@dowjones.com