French FM gives rosy outlook for 2006 economy

17th January 2006, Comments 0 comments

PARIS, Jan 17, 2006 (AFP) - Finance Minister Thierry Breton said Tuesday that the French economy would grow by 2-2.5 percent this year, confirming the government's target, and predicted the 2005 deficit would meet EU requirements.

PARIS, Jan 17, 2006 (AFP) - Finance Minister Thierry Breton said Tuesday that the French economy would grow by 2-2.5 percent this year, confirming the government's target, and predicted the 2005 deficit would meet EU requirements.

Speaking at a New Year's presentation to the press, Breton also said the economy grew 0.5-0.6 percent in the fourth quarter, which should lead to growth of 1.5-2 percent over the full-year 2005, in line with targets announced by the government last spring.

Economists' consensus was for 2005 annual growth of 1.6 percent.

Breton said "the vigor of our economy in the second half" had resulted in strong tax revenues, making him "more confident than ever" in reducing the public budget deficit to three percent of gross domestic product for 2005, down from the 3.7 percent ratio seen the previous year.

He said the reduction in the deficit "will surprise more than one", a reference to the forecasts of several economists in the private sector, who estimated that France's deficit would again this year exceed the three percent threshold set by the eurozone's Stability and Growth Pact.

The French deficit had breached the ceiling of the pact, which underpins the euro, for the previous three years.

Breton said the government's target of 2-2.5 percent economic growth for this year, on which the 2006 budget is based, was "a forecast that is now broadly shared by economists."

Earlier this month, Prime Minister Dominique de Villepin announced an ambitious program to stabilize France's finances, promising to eliminate the public deficit by 2010.

Copyright AFP

Subject: French news

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