French govt. says will reduce budget deficit later than promised

PanARMENIAN.Net - The French government has said it will reduce its budget deficit to below the EU threshold of 3% of GDP by 2017, two years later than promised, according to BBC News.

The new forecast indicates the public deficit will fall to 4.3% next year, but to 2.8% by 2017. It was released as Finance Minister Michel Sapin prepared to present his annual budget to cabinet.

Sapin said growth would remain weak, projecting that the economy would only grow very slightly this year.

"We have taken the decision to adapt the pace of deficit reduction to the economic situation of the country," he told a news conference. "Our economic policy is not changing, but the deficit will be reduced more slowly than planned because of economic circumstances - very weak growth and very weak inflation."

The French government is hoping to boost growth by cutting taxes, although this will have to be financed by further spending reductions.

France plans to cut public spending by €50bn ($63bn) by 2017. The country has missed a number of budget deficit targets and has struggled with high unemployment and low growth.

In August, three French ministers resigned amid a bitter row over economic policy.