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Business

Deficit to hit record 8.5% of GDP in 2010

Text by NEWS WIRES

Latest update : 2009-09-30

The French government vowed to continue its stimulus effort as it unveiled its latest budget Wednesday. Public deficit will grow to a record 8.2% of GDP this year and 8.5% in 2010, by which time public debt will have reached 84% of national output.

AFP - France's public deficit will grow to a record 8.2 percent of GDP this year and 8.5 in 2010, according to the government's budget on Wednesday, based on expected growth of 0.75 percent next year.
  
France is edging out of a recession caused by last year's global financial collapse, but the government vowed to continue stimulus spending, and warned that deficit levels will not begin to fall until 2011.
  
Under the eurozone stability pact, member states are supposed to keep their deficits under three percent, but most are far above this as public spending explodes and tax revenue falls during the crisis.
  
France's public debt will soar to 84 percent of national output in 2010, up from 68 percent at the end of 2008 and well above the theoretical 60 percent limit set when France and its partners launched the single currency.
  
Among the fiscal measures announced in the budget were a "green" carbon tax on households and businesses, and cuts in local business taxes.
  

Date created : 2009-09-30

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