French public debt to hit 87% of GDP in 2012: report

27th September 2011, Comments 0 comments

France's public debt will rise to roughly 87 percent of gross domestic product next year, according to the draft budget to be presented Wednesday, the daily Les Echos reported citing parliament sources.

The draft budget, to be presented to the cabinet of ministers, forecasts that the cost of servicing the public debt will come in at 48.8 billion euros ($66.5 billion) in 2012, down from the last government estimates in July of 50 billion euros, the newspaper said on its website.

The report did not provide any information about the size of the public deficit, which France has pledged to squeeze from 5.7 percent of GDP this year to 4.5 percent in 2012 and the EU's target of 3.0 percent in 2013.

Budget Minister Valerie Pecresse told the newspaper in an interview that 2012 was the first since 1945 in which state expenses will decline in absolute terms, excepting debt service payments and pensions.

The tax burden is set to rise to 44 percent of GDP next year, up from 43.2 percent forecast in last year's budget, and hitting the level when President Nicolas Sarkozy took office in 2007.

© 2011 AFP

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