France revises down its growth forecast for 2012

AP News
Posted: Oct 27, 2011 5:19 PM
France revises down its growth forecast for 2012

France was again forced Thursday to revise down its growth projections for next year, with its GDP expected to increase by just 1 percent.

Worsening global economic conditions have already forced France to cut its forecasts this summer. But President Nicolas Sarkozy promised during a television interview devoted to the European debt crisis that even slower growth would not derail his plans to balance France's budget by 2016.

"We will not deviate from this plan," he said in the interview aired on French television stations TF1 and France-2.

Ahead of next year's presidential elections, Sarkozy has staked his credibility on meeting those targets, despite the fact that France has not balanced its budget in three decades.

He said Thursday that the growth projection for this year remains unchanged at 1.75 percent of GDP. Next year's will slip from an expected 1.75 percent to 1 percent.

Slower growth means France will have to make even more cuts if it is to meet its deficit targets.

Sarkozy said another euro6 billion ($8.4 billion) to euro8 billion ($11.2 billion) needs to be slashed from next year's budget. He said those measures would be announced in the coming days.