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France to cut 2008 growth forecast

Latest update : 2008-03-27

French Prime Minister François Fillon has announced that he will lower economic growth forecasts to 1.7% to 2% for 2008, down from 2% to 2.5% earlier, in an interview with a weekly magazine.

PARIS — The French government will lower its economic growth forecasts for this year, Prime Minister Francois Fillon said in remarks appearing in Thursday's edition of L'Express magazine.

Fillon told the weekly in an interview that the new forecast will be between 1.7% and 2% for 2008.

The government had earlier put growth this year at between 2% and 2.5% but in recent weeks had made clear that would have to be revised down in light of the problems in the US economy and a global credit crunch.

Fillon insisted that the new forecast would have no effect on the budget for 2008, "which had been drawn up to cope with variations in growth on this scale", he said.

The budget was based on a growth forecast of 2.25%.

In the past few weeks, the European Commission has estimated French 2008 growth at 1.7%, the International Monetary Fund put it at 1.5% and the Organisation for Economic Cooperation and Development 1.8%.

Fillon also said the budget deficit for 2007 was now expected to come in "slightly above the 2.4% of gross domestic product initially expected".

As a result, the government will likely have to review this year's target of 2.3%, he said, adding that "the international economic situation is such that other countries are also going to have to revise their figures."

The premier rejected any idea of an austerity plan against this backdrop, arguing instead that "slower world growth calls for an acceleration and deeping of our reform efforts".

Date created : 2008-03-27