France to cut 2008 growth forecasts

26th March 2008, Comments 0 comments

French government will lower its economic growth forecasts for this year, Prime Minister Francois Fillon said.

   PARIS, March 26, 2008 - The French government will lower its economic
growth forecasts for this year, Prime Minister Francois Fillon said in remarks
due to appear in L'Express magazine Thursday.
   "The government's (new forecast) will be between 1.7 percent and 2.0
percent for 2008," Fillon told the weekly in an interview.
   The government had earlier put growth this year at between 2.0 and 2.5
percent but in recent weeks had made clear that would have to be revised down
in light of the problems in the US economy and a global credit crunch.
   Fillon insisted that the new forecast would have no effect on the budget
for 2008 "which had been drawn up to cope with variations in growth on this
scale."
   The budget was based on a growth forecast of 2.25 percent.
   In the past few weeks, the European Commission has estimated French 2008
growth at 1.7 percent, the International Monetary Fund put it at 1.5 percent
and the Organisation for Economic Cooperation and Development 1.8 percent.
   Fillon also said the budget deficit for 2007 was now expected to come in
"slightly above the 2.4 percent of Gross Domestic Product (GDP) initially
expected."
   As a result, the government will likely have to review this year's target
of 2.3 percent, he said, adding that "the international economic situation is
such that other countries are also going to have to revise their (deficit)
figures."
   The premier rejected any idea of an austerity plan against this backdrop,
arguing instead that "slower world growth calls for an acceleration and
deeping of our reform efforts."

AFP 

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