BERLIN (Reuters) - Germany's federal government likely borrowed some 4 billion euros less than it initially projected in 2013, due to higher tax revenues, an economist with the IfW economic research center said on Wednesday.

Berlin borrowed a net 21.1 billion euros compared with the 25.1 billion euros Finance Minister Wolfgang Schaeuble had projected for the year, IfW's Alfred Boss predicted.

Schaeuble's ministry said in December that Germany would borrow less than expected in 2013 for the fifth consecutive year. A spokesman said final figures are due in mid-January.

Boss said Berlin collected 1.3 billion euros more in taxes than expected last year. Other reasons for the lower borrowing included lower interest payments and less spending on defense. The country's jobless rate also remains near its lowest level since it reunified more than two decades ago.

However, the expert forecast a less rosy picture for 2014's public finances.

Boss said Schaeuble's planned borrowing of 6.2 billion euros this year would not be enough, adding that Germany would probably need 9.5 billion euros. Spending on welfare for the elderly alone will cost an extra 1.6 billion euros in 2014, Boss said.

Chancellor Angela Merkel's conservatives and their new coalition partners, the center-left Social Democrats (SPD), have agreed a number of measures to boost income and spur demand, including higher pensions for mothers and a minimum wage of 8.50 euros an hour.

But businesses have argued that the plans are too costly and threaten Germany's competitiveness.

(Reporting by Gernot Heller and Thomas Seythal; Editing by Hugh Lawson)

 

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