French growth goes neg­a­tive

The Myanmar Times - - International Business -

FRENCH growth suf­fered a down­ward revision just days be­fore the gov­ern­ment puts to­gether its fi­nal bud­get ahead of pres­i­den­tial elec­tions next year.

France’s econ­omy con­tracted by 0.1 per­cent in the sec­ond quar­ter, the Insee sta­tis­tics agency said, re­vis­ing an ini­tial es­ti­mate of zero growth.

This adds a layer of un­cer­tainty to am­bi­tious growth and deficit tar­gets that Pres­i­dent Fran­cois Hol­lande’s team reaf­firmed last week as cam­paign­ing for 2017 pres­i­den­tial elec­tion gets un­der way.

The revision, which shows both con­sumers and busi­nesses held back spend­ing in April through June, high­lights France’s dif­fi­cul­ties in com­bin­ing spend­ing boosts in the run-up to the elec­tion with the need to bring the deficit in line with euro­zone rules.

Fi­nance Min­is­ter Michel Sapin said he stood by his 1.5pc growth fore­cast for this year and next.

“All of this does not put in ques­tion the growth fore­casts of around 1.5pc for 2016 and 2017,” he said.

Growth of that size is in­stru­men­tal for the gov­ern­ment’s tax and spend­ing plans as well as honour­ing the prom­ise to bring the pub­lic deficit back un­der the EU limit of 3pc of gross do­mes­tic prod­uct. –

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