The Government Lowered its Growth Forecast for France in 2016

Finance General News
The Government has lowered its Growth forecast for France in 2016

ECONOMY: On Europe 1, Friday morning, the Minister of Economy and Finance Michel Sapin has revised down its growth forecast for France in 2016. “I think it’s 1.4%,” he said.

The government lowered its forecast for economic growth in 2016 from 1.5% to 1.4%, said this Friday, the Minister of Economy and Finance Michel Sapin, who must present the today its draft budget.

“I think it’s 1.4%. In any case the figure we will retain this year as hypothesis “, said Michel Sapin on Europe 1 .

According Bercy, this reduction does not affect the objective of reducing the public deficit to 3.3% of GDP this year.

In a notice to the government made public Friday, the High Council of Public Finance (HCFP), independent body to assess the credibility of government estimates, considered the new growth target “achievable”, and the deficit “realistic “. He stressed that it remained conditioning “strict expenditure management by year end” .

“No effect” on unemployment

On growth, Michel Sapin ruled that the new forecast had no negative impact on falling unemployment.

“What matters is to know ” is what it has consequences in terms of unemployment? ” No, the proof is that we never created many jobs, net jobs (..) since the crisis”, he has said.

His entourage at Bercy noted that the reduction of 0.1 percentage point of GDP did not change “the dynamics at work for a year and a half” .

The figure of 1.4%, however, remains higher than forecast by Insee, the European Commission, the International Monetary Fund (IMF) and the OECD, betting on an increase of 1.3% of GDP in 2016.

In its autumn forecast, the European Commission estimated that the deficit target of Paris, 3.3% this year, should be held.

These figures will be included in the draft supplementary budget law (RFLP), or amending budget to be presented Friday afternoon by the government at the Council of Ministers. It is an opportunity to make budget adjustments to take account of economic priorities and unforeseen events that occurred during the last months and include new tax measures.

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