I agree, without private sector credit expansion (falling nominal savings rate) or rising exports these two go together over time:

German Economic Growth Will Likely Slow, Finance Ministry Says

By Brian Parkin

May 19 (Bloomberg) &#8212 The pace of Germany’s economic growth will probably slow by mid-year after jumping 1.5 percent in the first quarter, the Finance Ministry said in its monthly report. Economic growth “may be somewhat slower during the rest of the year,” the ministry said. While business confidence has declined, “it remains at a high level” and unemployment, at a 19-year low last month, will continue to profit from growing domestic demand, the ministry said. Germany’s Economy Ministry sees growth of 2.6 percent this year. Tax revenue for the federal government and states jumped 8.9 percent in the first quarter compared with last year, led by sales tax, the ministry said. Federal and state tax revenue in April grew 3.4 percent compared with a year ago, it said.

Bundesbank Says German Deficit May Fall Below 2% This Year

Brian Parkin and Jana Randow

May 20 (Bloomberg) &#8212 Tax revenue growth and spending cuts will probably help German Chancellor Angela Merkel’s government push down the budget deficit, setting an example for fiscal discipline in Europe, the Bundesbank said.

Germany’s budget shortfall could drop below 2 percent of gross domestic product this year, the Frankfurt-based central bank said in its monthly report published today.

“This notably mirrors a clear structural improvement, although the ongoing cyclical recovery is also making an important contribution,” the Bundesbank said.

The German government may be able to cut its spending gap to some 30 billion euros ($43 billion) from the 48 billion euros in the budget, the Bundesbank said. New tax forecasts that show revenue soaring over earlier estimates through 2014 may further help to push down the federal deficit beyond 2011, it said.

“A federal deficit of 30 billion euros seems achievable” this year, the Bundesbank said. “In subsequent years, this improved situation will be perpetuated,” boosting the chances of the government adhering to its target of balancing the federal budget by 2015, it said.