The German federal government agreed on Wednesday to stick to its target of a balanced budget over the next four years despite uncertainty over Britain's exit from the European Union (EU) and the influx of refugees.

The federal government plans to spend 328.7 billion euros (about 364.4 billion U.S. dollars) in 2017, a total of 3.7 percent more than the target of 316.9 billion euros this year. By 2020, annual spending will increase to 349.3 billion euros.

However, Germany will not have to fund the additional spending with new debt, thanks to growing tax revenues resulted by the buoyant economy.

It plans to reduce its debt to below 60 percent of gross domestic product (GDP) by 2020, meeting the requirement of the EU's Stability and Growth Pact for the first time since 2002.

"Germany remains reliable. We are strengthening the capacity of the state in future without adding new debt," said German Finance Minister Wolfgang Schaeuble.

The government said it would raise 77.5 billion euros by 2020 to cope with the influx of refugees and to combat the causes of migration to the EU.

Over the next four years, Germany also plans to increase public investment in areas including research and development, transport and the economy's digital transition. Expenditures on defense and internal security will also be raised. (1 euro = 1.11 U.S. dollars)