French FM sticks with growth forecast for 2006

9th January 2006, Comments 0 comments

PARIS, Jan 8 (AFP) - French Finance Minister Thierry Breton on Sunday stood by his forceast for economic growth this year at "between 2 and 2.5 percent", while adding that France could do even better.

PARIS, Jan 8 (AFP) -  French Finance Minister Thierry Breton on Sunday stood by his forceast for economic growth this year at "between 2 and 2.5 percent", while adding that France could do even better.

"I am not content" with that growth rate, "France can do better," Breton said in an interview with Europe 1 radio. He noted that his 2006 growth forecast was also the consensus estimate of economists.

Looking back on 2005, Breton noted the eight consecutive months of a drop in unemployment, a chronic problem for the French economy, which has hovered near 10 percent of the workforce.

He also said that 2005 "was a very good year for consumer spending" and that trend would continue this year.

Last Tuesday, the national statistics institute INSEE said the French economy was on track to achieve 1.5 percent growth for the full year of 2005.

The country's finance chief also predicted that France's budget deficit "would respect" in both 2005 and 2006 the ceiling of three percent of Gross Domestic Product (GDP), which is the deficit limit set by European rules for countries sharing the single euro currency.

France like such eurozone countries as Germany has exceeded that deficit limit in recent years.

Breton claimed France's "snowball of public debt" began to form during the Socialist presidency of the late François Mitterrand from 1981 to 1995, citing leftist measures such as nationalizing industries, limiting the retirement age to 60 and hiring some 330,000 additional civil servants.

As a member of the center-right UMP government of Prime Minister Dominique de Villepin, Breton conceded that the right has also made "some errors", such as lifting the tax limit on the rich, which led to "tens of thousands of French citizens leaving the country with their money and their enterprising spirit".

However, he noted that with a recent measure limiting the income subject to taxation to 60 percent, "there are people who are going to come back, and that's good for the economy."

Copyright AFP

Subject: French news

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