IMF warning: France will miss 2013 3% deficit target

Growth remains sluggish and the near-term outlook is subject to downside risks: IMF

WASHINGTON: The Washington-based International Monetary Fund (IMF) said Friday that France’s growth outlook “remains fragile” and warned that it will probably miss its target of reducing its public deficit to 3% next year. “Growth remains sluggish and the near-term outlook is subject to downside risks,” it said, saying France’s 2013 deficit will not fall below 3.5%, while growth will fall from 1.7% in 2011 to 0.2% in 2012. President Francois Hollande’s French government built its 2013 budget on an expectation of reducing its annual deficit to 3% of the gross domestic product (GDP), the threshold imposed on members of the eurozone single-currency bloc. But Hollande’s team is hoping that growth will recover to 0.8% next year, a figure economists at the IMF – the global lender of last resort – regard as over-optimistic.

Published in The Express Tribune, December 23^rd, 2012.