Oil price threat to French growth

19th October 2004, Comments 0 comments

PARIS, Oct 19 (AFP) - French junior Budget Minister Dominique Bussereau said on Tuesday that the government's forecast of 2.5-percent growth in 2005 still looked "reasonable" but acknowledged that it might have to be changed if the price of oil remained high.

PARIS, Oct 19 (AFP) - French junior Budget Minister Dominique Bussereau said on Tuesday that the government's forecast of 2.5-percent growth in 2005 still looked "reasonable" but acknowledged that it might have to be changed if the price of oil remained high.

He said on French radio that the figure of 2.5-percent growth of the French economy next year as signalled in the budget was "reasonable".

Economists thought that the rate of growth for this year would continue next year, even though their consensus figure was nearer 2.2 percent.

However, he said, it was important for the government to "show its political will to continue doing everything to help growth".

But if the price of oil turned out to be high on a structural basis, the figure of 2.5 percent for 2005 would be revised downwards.

In the event of oil price spikes, the estimate of 2.5 percent remained credible, but "if the price stays above USD 60 (a barrel) permanently, we will have to revise our growth estimate", he said.

© AFP

Subject: French News

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