France stands by balanced budget in 2017, cuts and taxes

July 4, 2012

, PARIS, Jul 4 – The new French Socialist government stood by commitments to meet deficit targets and balance its budget by 2017 with extra measures on Wednesday, raising taxes and cutting back the burden of public spending.

The French economy is expected to grow by 2.0 percent per year from 2014 to 2017, the government said, the day after cutting growth forecasts for this year and next and warning of the “crushing” burden of deficits and debt.

The public deficit will fall to 4.5 percent of output this year from 5.2 percent in 2011, and to the EU ceiling of 3.0 percent next, and will be in balance in 2017, the government said.

The public debt of accumulated deficits will rise above 90 percent of output to a high point of 90.6 percent in 2013, falling to 82.4 percent in 2017.

These figures are based on expectations that the economy will grow by 0.3 percent this year, 1.2 percent next year and then by 2.0 percent up to 2017.

The overall ratio of public spending to gross domestic product will fall from 56.2 percent this year to 53.4 percent in 2017.

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