France revises growth forecast downwards

Sunday 07 April 2013 11.16
Pierre Moscovici said the forecast for GDP growth would be 0.1%
Pierre Moscovici said the forecast for GDP growth would be 0.1%

French Finance Minister Pierre Moscovici said today he would revise growth forecasts downwards, in line with European Commission estimates.

The eurozone's second-largest economy is struggling to meet economic targets.

The Socialist government had previously said its growth target could be too optimistic.

It acknowledged it will miss a 2013 goal of bringing its deficit down to 3% of output, urging Germany to grant it more time to meet the target.

Speaking on Europe 1 radio, Mr Moscovici said France had decided to offer the European Commission "prudent and realistic estimations" when it presents its new growth and deficit forecasts in mid-April.

France's economy shrank by 0.3% in the fourth quarter of 2012, official data showed last month, as rampant unemployment weighed on household spending.

Mr Moscovici said the forecast for GDP growth would be 0.1% rather than the 0.8% on which the government built its budget for 2013.

"It's the figure given by the European Commission, it's the figure given by France and I believe it corresponds with what we can actually achieve at least," Mr Moscovici said.

He said that 2014 growth would be revised to 1.2% from 2% and hoped it would rise to 2% in 2015.

The new forecasts are in line with the Commission's pessimistic view, as President Francois Hollande struggles to reverse a rise in unemployment, above a 13-year high.

Mr Moscovici confirmed the deficit-cutting timetable would target 3.7% of GDP by the end of this year with a view to hitting the EU's 3% goal in 2014.

"I think we have to base ourselves on these figures," he said. "We could do a little more ... I hope it will be more."

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