German Finance Minister Peer Steinbrueck said here Friday that he expected the country's deficit to drop from last year's 1.7 percent to 1.2 percent of gross national product.

Speaking at the parliament, Steinbrueck said a lower deficit would put Germany on course of a balanced budget.

He said his ministry has expected the economic growth to continue at a good rate this and next year, increasing the chance to reduce deficit.

He attributed economic recovery, falling unemployment rate and increased tax revenues of billions of euros to the reduction of the deficit.

Germany saw an economic growth rate of 2.7 percent last year, the highest in six years, and experts predicted a growth rate of more than 2 percent in 2007.

Source: Xinhua