France’s Economy to Grow Faster than Expected, Says Finance Minister

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France’s Economy to Grow Faster than Expected, Says Finance MinisterFrance’s economy may develop faster than estimated in 2014, contributing to the government’s efforts to match budget-deficit targets set by the European Union, says Finance Minister Michel Sapin.

“We’ll do better in 2014, slightly better than the 0.9 percent growth now forecast by the government,” said Sapin in an interview on Saturday, reported Bloomberg. “For 2015, I don’t have figures. You see our objective — it’s to do better than what people are expecting,” he said. “That’s our whole strategy.”

France had a deficit of 4.3 percent of the gross domestic product last year. President Francois Hollande agreed in 2013 to trim the gap to 3.6 percent in 2014 and 3 percent next year, which is the European Union limit. By agreeing to the 2015 target, the EU was allowing France to delay meeting the deficit target for the second time since the sovereign debt crisis began.

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Hollande’s Socialist Party fared miserably in the last municipal elections, spurring him to look for ways to revive economic standing. Sapin’s comments show that the government is exploring measures to boost growth and meet the budget deficit promises.

Polls published on Saturday and Sunday show that Hollande’s approval rating has plunged and most voters will try to contribute their part to help trim the deficit. Hollande’s popularity has slid 5 points since March to 18 percent, based on Journal du Dimanche’s Ifop Poll.

To reverse his declining political fortunes, Hollande promised to reduce taxes for households, and slash payroll charges and taxes on businesses. However, Sapin said the economy is still too weak to reduce unemployment claims from the all-time high of 3.3 million. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com