France trims public deficit as growth edges up

25th March 2016, Comments 0 comments

France put tighter reins on its public sector deficit last year than expected on the back of slightly better growth, data showed Friday, as the country struggles to meet eurozone rules.

France's public deficit fell to 3.5 percent of gross domestic product (GDP) last year from 4.0 percent the previous two years, according to national accounts published by the statistics agency Insee.

That was slightly better than the government's target of 3.8 percent for the year.

"It's our budgetary rigour which has allowed us to attain these good results," Finance Minister Michel Sapin said in a statement.

He said the reduction was "all the more notable" as the government had faced unforeseen spending such as on ramping up security and said France would continue reducing the deficit this year and next while still financing its priorities.

EU rules set the limit on public deficits at three percent of an economy's total annual output. The threshold for total public debt is 60 percent of output.

France's gross public debt however grew slightly in 2015, to 95.7 percent of GDP amounting to more than two trillion euros, Insee said.

Growth in the eurozone's second biggest economy, meanwhile, was slightly better in 2015 than originally thought.

Insee revised its growth figure for France up to 1.2 percent from a previously announced 1.1 percent but left its fourth-quarter estimate unchanged at 0.3 percent.

In 2014, French growth was 0.2 percent.

On Thursday, France reported a rise in unemployment of 1.1 percent in February, the biggest monthly jump in joblessness in two and a half years.

President Francois Hollande has made jobs his government's top priority, and has said he will not seek reelection in 2017 if he fails to bring down the unemployment rate.

© 2016 AFP

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