Market Analysis

The German government is reportedly considering a supplementary budget for this year, potentially amounting to €11 billion ($11.89 billion) in additional borrowing, while adhering to the debt brake, according to sources cited by Bild newspaper on Thursday. The Ministry of Finance recently briefed coalition government budget officials on these plans.

A government source informed Reuters that while such a move is plausible, no final decision has been made yet. The debt brake, a fiscal rule enshrined in Germany's constitution, allows for a limited deficit of 0.35% of GDP, with provisions for increased borrowing during economic downturns. For 2024, slower-than-anticipated economic growth during budget preparations could justify this additional borrowing.

"We are closely monitoring tax revenue and budget execution and remain prepared to take action as needed," stated a spokesperson from the finance ministry to Reuters.

Paraphrasing text from "Reuters" all rights reserved by the original author.