REUTERS
The migration crisis will lead to a small German budget deficit next year, according to the finance ministry's latest report, highlighting the financial strain that the post-World War II record number of asylum seekers is putting on the country's finances, according to The Wall Street Journal.
"The government expects a slight national budget surplus for 2015," said Deputy Finance Minister Thomas Steffen in the ministry's October monthly report. However, "current projections for the coming year point to an almost balanced national account due to higher spending mainly for taking in and housing refugees and asylum seekers," the report says.
Earlier this month, the government reported Germany's 2016 budget planning to the European Commission, including this prediction. Berlin had previously forecast a balance budget for next year, after posting a budget surplus of 0.3% of gross domestic product in 2014 and a deficit of 0.1% for both 2012 and 2013.
The national budget includes the budgets of the federal, state and local governments as well as those of social security systems.
The budget warning comes as Germany expects for this year alone between 800,000 and 1 million new asylum seekers, more than four times last year's total. The record tide of people from war-torn regions in parts of the Middle East and North Africa is expected to push up costs for housing well as for providing health care and education.
Germany's district association estimates that housing 800,000 new asylum seekers this year will cost the country roughly EUR 15 billion ($17 billion), around EUR 9.6 billion more than in 2014.
Given solid growth rates, higher-than-expected tax revenues and low unemployment levels, Germany is expected to shoulder the extra spending for this year without taking on new debt.
But the economic upswing has slowed somewhat since September, amid higher global economic risk and slowing growth in China.
German tax revenues rose by 5.7% during the January-September period year over year, but the intake was only up 3.5% in September alone compared with the same period last year.
The finance ministry said the labor market is still in a "very good state" but unemployment levels will rise slightly next year due to high immigration numbers, which will push up social welfare costs.