2007 looks 'very good': French finance minister

14th August 2006, Comments 0 comments

PARIS, Aug 13, 2006 (AFP) - French Economy Minister Thierry Breton painted a rosy picture Sunday of the prospects for the national economy next year, predicting solid growth and falling unemployment.

PARIS, Aug 13, 2006 (AFP) - French Economy Minister Thierry Breton painted a rosy picture Sunday of the prospects for the national economy next year, predicting solid growth and falling unemployment.

In an interview to be published in Monday's La Tribune financial newspaper, extracts of which were released Sunday, he said there was a strong trend to a return to "solid growth".

Reacting to news on Friday that econmic growth in the second quarter  — at 1.1 percent to 1.2 percent — was higher than expected, Breton said there "was no reason to think the trend would reverse itself in the near future".

"French growth is balanced, 2007 is looking good, even very good," he said.

"Growth will let employment rise, which will sustain consumption; exports are reaching records and businesses can still increase their activities," he said.

Inflation "had been brought under control" and was even tending to fall, he said, adding that the rise in oil prices had not had a knock-on effect on prices.

Consumer prices fell by 0.2 percent in June, the national statistics institute INSEE reported Friday, with a year-on-year increase of 1.9 percent.

Breton predicted that the target of 200,000 new jobs this year, predicted by INSEE, would be passed.

"INSEE puts the number of jobs created in 2006 at 200,000. My feeling is that we shall do better," he told the newspaper. Of these 80 percent would be in the private sector.

In June INSEE predicted 195,000 new jobs this year, compared with 99,000 in 2005.

But Breton warned that eurozone policy had to avoid harming growth and said that 12 countries sharing the single currency were "vigilant" and spoke frequently to the European Central Bank.

The ECB said on Thursday it would raise interest rates again if economic recovery in the eurozone continued. Earlier this month it announced an quarter-point increase, the fourth rate rise since December, to three percent, the highest for three and half years.

Copyright AFP

Subject: French news

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