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German budget: stimulus confirmed, deficit above 3%

Germany’s budget plans for 2025-29 confirm that the much anticipated big fiscal stimulus is coming and leave us comfortable with our view that GDP growth will pick up significantly from next year and the deficit will rise to as much as 4% of GDP. The smoothness of the coalition negotiations also suggests that Merz’s failure to be elected Chancellor in the first round of voting might have just been a blip after all.  

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