FRANKFURT (AFX) - The budget deficit in the first quarter rose by 0.5 bln eur to 15.5 bln eur from a year earlier, and for 2001, the deficit quota might exceed the targeted 1.5 pct of nominal GDP, the Bundesbank said in its monthly report.
It said this year's target for the deficit quota had been set by the German government last October at 1.5 pct of nominal GDP, compared with 1 pct in 2000.
"From the present standpoint, the state deficit quota -- based on the national accounts system and which was at 1 pct last year excluding the UMTS earnings -- will be higher than the 1.5 pct target in the German stability program in October," it said.
It said the main reason for the deficit expansion is the "significant" shortfall in tax revenues as a result of the tax reform. Another reason is the unfavourable developments in the economy compared with expectations held last autumn, it said.
The deficit in corporate taxes will continue to increase, mainly due to the impact of the tax reform, but the government will try to compensate for the shortfall through asset divestments, it said. It added that Germany might also go beyond the earlier target for a deficit of 65-75 bln dm, if it does not embark on further savings measures.