A new report estimates that Germany will spend around €20 billion on refugees, but a record surplus should also help absorb the cost.

The Kiel Institute for the World Economy (IfW) calculated in a report on Wednesday that Germany will end up spending around €20 billion this year on refugees.

Still, the institute said that the government would be able to take on this level of spending.

"This is a substantial sum, but given that it makes up around 1.4 percent of the total national budget, it will be manageable," said Dr. Jens Boysen-Hogrefe of the IfW, in a statement.

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