France sees 2010 growth target on track

11:59, August 21, 2010      

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France is on track to meet its forecast economic growth of 1.4 percent growth this year after registering positive economic indicators, the Elysee presidential office said Friday.

"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," the office said in a statement.

Growth in Europe's second biggest economy rose by 0.6 percent in the second quarter this year from 0.2 percent in the first quarter thanks to a lift in household expenditure and buoyant investment.

The economic growth helped the country create 35,000 new jobs over the period versus 23,900 jobs during the first quarter.

"These (results) allow us to forecast a two-percent growth rate in 2011," the statement said.

France is facing a widening budget deficit and working hard to narrow its ratio to gross domestic product to 8 percent this year and to 6 percent in 2011 by cutting public spending.

"Narrowing the public deficit ... remains a major target of the country whatever the growth level," President Nicolas Sarkozy has said.

"Reducing the deficit must be achieved by reducing public spending by priority. Neither the income tax nor tax on companies will be increased," he said.

The government also expected to remove 10 billion euros (12.6 billion U.S. dollars) in tax loopholes in the autumn. Operating spending and state intervention will fall by 10 percent by 2013 from 5 percent in 2011.



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