13 July 2005, 16:03  French Fin Min: France Doing Utmost To Cut Budget Gap

Speaking during a visit to Normandy to promote consumer confidence and safety, Breton said "cutting the deficit below 3% of gross domestic product remains the target." "Everyone knows we had a weak first quarter and that's weighed on our growth potential, but we are doing everything we can to meet the deficit target," Breton said. The French economy grew 0.3% in the first quarter compared with the previous quarter, hampered by slowing consumer spending. Breton has lowered his economic growth forecast for France this year to "a ceiling of 2%" from a previously estimated range of 2% to 2.5%. The minister's comments come one week after official figures showed the budget for the first five months of the year widened substantially from the corresponding period a year earlier, as public spending rose 2.6%. But Breton said he remains convinced the French economy is on track for recovery in the second half. "We are seeing encouraging signs, and I think business confidence is picking up," Breton said. "Obviously, like the rest of my European counterparts, I'm concerned about the high level of oil prices," the minister added. Breton has previously indicated that he believes France can achieve growth of close to 2% this year provided oil prices recede in the longer term.

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