French 2003 public defict hits 4.1 pct: official

2nd March 2004, Comments 0 comments

PARIS, March 1 (AFP) - France's public deficit widened to 4.1 percent of output last year from 3.2 percent in 2002, exceeding eurozone budget rules for the second straight year, official figures showed Monday.

PARIS, March 1 (AFP) - France's public deficit widened to 4.1 percent of output last year from 3.2 percent in 2002, exceeding eurozone budget rules for the second straight year, official figures showed Monday.

The shortfall, which the statistics institute INSEE is to report to the European Union's executive commission, is well in excess of eurozone regulations requiring member countries to hold public deficits to three percent or less of gross domestic product.

France is also set to breach the threshold this year with an expected deficit of 3.6 percent of GDP but has pledged to bring that down to 2.9 percent in 2005.

INSEE also said that France's public debt amounted to 63 percent of (GDP) in 2003, up from 58.6 percent in 2002. Brussels requires EU countries to have public debt equivalent to less than 60 percent.

The widening in the public deficit, which is made up of central and local government accounts as well as those for social welfare services, is largely attributable to a shortfall in the state budget of nearly EUR 57 billion (USD 71 billion), reflecting spending hikes for health insurance and unemployment compensation and lower receipts.

The government is banking on a pickup in economic momentum to boost tax receipts and on reforms to its health insurance scheme to reduce spending starting next year.

Germany too has failed to meet the three percent public deficit limit, reporting a shortfall of 3.9 percent in 2003 and 3.5 percent in 2002.

Portugal's public deficit hit 4.4 percent of output in 2001 but the government managed to stay within eurozone requirements in 2002 and 2003.

© AFP

                                                              Subject: France news

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