France cuts 2011 growth forecast to 2 pct

11:56, August 21, 2010      

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The French government cut its economic growth forecast for 2011 to two percent from 2.5 percent after it held an economic meeting in the south of the country.

France's economic growth achieved in the first several months of this year forced the revision, President Nicolas Sarkozy's Office said in a statement following the meeting in Bregancon, near Marseille.

France has recorded growth rates of 0.2 percent and 0.6 percent respectively in the first and the second quarter this year, according to statistics published a week ago by France's National Institute of Statistics and Economic Studies (INSEE).

The government had estimated a growth rate of 1.4 percent for 2010 and 2.5 percent for 2011.

"Given the rebound in economic activities, the objective of a 1.4 percent growth will be reached or exceeded for the whole year of 2010," his office, the Elysee, said in a statement.

However, the forecast of 2.5 percent has been judged "too optimistic" by the International Monetary Fund, which expects France to show weak growth at 1.4 percent for 2010 and 1.6 percent for 2011.

Economists said the political austerity measures aimed to reduce the deficit announced by the French government would have an impact on the economic growth for the next year.

The French government is expected to present its financial bill for 2011 next month. In early July, France's National Assembly passed the guidelines of Budget 2011, aiming to reduce the public deficit from eight percent to six percent.



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