French economy still on track for growth

19th December 2006, Comments 0 comments

PARIS, Dec 19, 2006 (AFP) - The French economy will grow by 2-2.5 percent this year, Economy and Finance Minister Thierry Breton assured on Tuesday, following flat performance in the third quarter.

PARIS, Dec 19, 2006 (AFP) - The French economy will grow by 2-2.5 percent this year, Economy and Finance Minister Thierry Breton assured on Tuesday, following flat performance in the third quarter.

Breton said: "There was a momentary slowdown in the summer which turns out to have been a technical setback."

Since the middle of 2005 the French economy had been driving ahead and the outlook for the fourth quarter of this year was "good, even very good", he said.

This was largely owing to a strong international environment and a likely surge of French exports, he told a quarterly press conference.

The price of oil, at about US $60.0 per barrel, was "clearly" too high, but the economic situation in Europe, and particularly in Germany, "is the best for six years", and the exchange rate of the euro against the dollar was steadying.

He also said that annual overspending on public accounts would fall to 2.5 percent of output next year from 2.7 percent this year.

The national debt would fall this year to 64.6 percent of output this year from 66.6 percent last year, and then to 63.6 percent next year.

Breton said the European Union was likely to lift a so-called excessive deficit procedure against France next month because France had cut overspending to 2.9 percent of output in 2005, within the EU ceiling of 3.0 percent.

The debt is the accumulation of past annual public deficits, and the high level of debt is often mentioned by political personalities as campaigning heats up for a presidential election in April.

Breton said that the draft finance bill laid down a public deficit for 2007 of 2.5 percent and that "this is what we are working towards: we are well on the way."

The public deficit, under the terms of the Maastricht Treaty that created the eurozone and of the Stability and Growth Pact that extends rules for economic convergence, define the public deficit or surplus as covering spending by central government, social budgets and local authority budgets.

Copyright AFP

Subject: French news

 

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