France worsens forecasts for growth, budget shortfalls
FRANCE cut its forecast for growth next year to 0.9pc on Wednesday and said its public deficit would fall more slowly than previously expected as a result.
Presenting headline figures for the 2014 budget, Finance Minister Pierre Moscovici said the government now targets a deficit of 4.1pc of national output this year, up from an earlier forecast of 3.7pc, and 3.6pc next year, up from an initially projected 2.9pc.
In what Prime Minister Jean-Marc Ayrault described as the "battle for growth", spending curbs of €15bn will make up the bulk of the total €18bn in deficit reduction, with the remainder from higher taxes.
The 2014 growth forecast, revised from the 1.2pc it predicted in April, brought the government's projections more in line with those of the European Commission and the bulk of independent economists.
The new numbers confirm France will use an extra two years slack granted by the EU to rein in the public sector deficit to below 3pc of output in return for commitments to economic reforms.
The growth forecast for 2013 remains a feeble 0.1pc.