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Public deficit reached 3.4% of GDP in 2008, forecast worse for 2009

As the economic crisis continues to take its toll in 2009, figures from French statistics institute INSEE show France's public deficit topped 65.9 billion euros - 3.4% of its GDP - in 2008, with even worse forecasts in place for 2009.

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France’s public deficit reached 65.9 billion euros in 2008, equal to 3.4% of the GDP, according to data released from the French statistics institute INSEE on Tuesday, surpassing the 3% recommended by the EU.

 

The country has also racked up some 1.327 trillion euros of public debt, equivalent to 68.0% of the GDP, 0.7% more than French Budget Minister Eric Woerth had earlier predicted.

 

The figures are due to an increase in public funds to help fend off the effects of the crisis.

 

But much worse is in store for this year. Forecasters point to a budget deficit of 103.8 billion euros, or 5.6% of the GDP, taking into account the costs of stimulus plans and bailouts, including 6.9 billion euros for the auto industry.

 

The European Commission wants France – among others – to get its deficit under 3% and has given the country until 2012 to do so. The deadline could be further extended if the global recession worsens.

 

Public debt could even shoot up as far as 74% in 2009, according to the latest government forecasts, a 10-point increase in just two years.

 

 

 

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