France Feels Freeze, Lowers 2008 Growth Guess

31 March 2008

PARIS: French prime minister François Fillon, speaking last week to L'Express magazine, conceded that the nation's prospects for economic growth in 2008 have diminished.

He accordingly lowered the government's earlier forecast range from 2%-2.5% to a less optimistic 1.7%-2%. 

But ever the politician, Fillon insisted that the new forecast would have no effect on the government's budget for 2008, "which had been drawn up to cope with variations in growth on this scale".  

However, he did not elaborate on how this equilibrium might be achieved, even though the budget is based on a growth forecast of 2.25%. 

Turning to past performance, the budget deficit for 2007 is now expected to come in "slightly above the 2.4% of gross domestic product initially expected". 

As a result, France will likely need to review its 2008 target of 2.3%, Fillon admitted, although "the international economic situation is such that other countries are also going to have to revise their figures."

There will be no austerity cutbacks, he assured. Instead, "slower world growth calls for an acceleration and deepening of our reform efforts".

Data sourced from; additional content by WARC staff