France sees 2010 deficit below target of 8 pct: minister

14th September 2010, Comments 0 comments

French Budget Minister Francois Baroin revised the 2010 public deficit estimate lower on Tuesday, forecasting that it would come below the 8.0 percent of output targeted by the government.

"We can say today that we will below 8.0 percent ... by the end of the year, which means that the step to be taken next year ... will be less high than expected," Baroin said on RTL radio.

"It would be premature to say that it will fall to 7.8 percent, 7.9 percent, but it will be below 8.0 percent," he added.

The French government has set a target of cutting the gap in the public finances from 8.0 percent of gross domestic product this year to 6.0 percent next year.

The deficit hit a record 7.5 percent last year as tax revenues collapsed and spending soared in the face of the worst post-war economic downturn.

French Prime Minister Francois Fillon estimated on Friday the economy would grow more quickly than expected this year, predicting France would see growth of "at least 1.5 percent" instead of the 1.4 percent previously.

"All the surplus receipts linked to economic activity will be entirely devoted to reducing the country's debt," Baroin said.

EU rules under the Stability and Growth Pact require the public deficit to be no more than 3.0 percent of output, with the intention that in times of growth EU and notably eurozone countries move towards surpluses.

Several members, including France, had difficulty in keeping within the 3.0-percent limit and the effects of the global financial crisis pushed deficits in several countries far beyond the ceiling.

© 2010 AFP

0 Comments To This Article