France sticks to growth, public deficit forecasts

GMT 10:16 2016 Wednesday ,13 April

Arab Today, arab today France sticks to growth, public deficit forecasts

French Finance Minister Michel Sapin
Paris - AFP

France said Wednesday it was on track for modest growth this year at the same rate as earlier projections and also left its public deficit forecast untouched.

Gross domestic product (GDP) growth in the eurozone's second biggest economy is expected to be 1.5 percent in 2016 and the same next year, the finance ministry said.

That's slightly more optimistic than forecasts by both the European Commission and the International Monetary Fund.

France's public deficit is still expected to be 3.3 percent of GDP this year, dropping to 2.7 percent in 2017, bringing it in line with EU rules that set the limit on public deficits at three percent of an economy's total annual output.

The ministry said however that to reach these targets significant extra savings, both this year and next, would be needed.

Prices in France meanwhile are set to rise less than originally forecast at the start of the year.

Falling oil prices have helped push inflation projections down to 0.1 percent instead of the previously forecast 1.0 percent in 2016, the ministry said.

Consumer prices in March fell in France by 0.1 percent compared to a year earlier but increased 0.7 percent from the previous month, according to data released separately Wednesday by the Insee statistics agency.

Manufactured goods reverting to their previous prices after New Year's sales helped drive the monthly increase, while the start to 2016 has also seen energy prices rebound and firming food prices, it said.

France's public debt, which has grown since the 2008 financial crisis and currently stands at nearly 2.1 trillion euros ($2.4 trillion), is set to go on increasing this year and next, but at a slower pace than previously expected, the finance ministry said.

It was on course to stand at 96.2 percent of GDP in 2016, it said.


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