In April, Berlin had said it expected its 2013 public deficit to be 0.5 percent of GDP. Last year the country posted an account surplus.
The data was included in a regular bi-annual report of public finances to the European Commission.
Germany, Europe’s top economy, said the 0.2-percent deficit figure covered budgets for the federal government, the 16 regional states and local governments.
The finance ministry said it had seen improvement on all three levels.
“Structurally, meaning adjusted for business cycle effects, the German state will for the second year in a row post a surplus,” the ministry said.
It said debt would decline by 1.5 points to 79.5 percent of GDP.
“Responsible budget policy but also the decline in debt resulting from measures linked to the financial market crisis played a role,” it said.
As the debt crisis ravaged its eurozone partners, Germany has enjoyed historic low borrowing costs on its debt.
The low rates have allowed Germany to significantly cut its interest costs in recent years, improving its public finances and bringing it closer to its target of a balanced federal budget, which it is expected to reach by 2015.