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Economy

France's budget deficit falls as Bank of France forecasts zero growth

media France's Budget Minister Valérie Pécresse at the Elysée Palace on 19 January 2011 AFP/Boris Horvat

France’s budget ministry announced on Wednesday that the central budget deficit had fallen at the end of 2011, and was hailed as a sign that the country was making financial progress. The Bank of France, however, predicted economic stagnation for the first part of 2012.

The country's deficit fell to 90.8 billion euros from a record 148.8 billion euros the previous year.

France’s Economy Minister Francois Baroin told RTL radio on Wednesday that France is “a serious country, which is modernising itself and will be ahead of schedule on the plan to reduce its deficit, whereas six months ago we were told it was unattainable."

Meanwhile, The Bank of France predicted on Wednesday that France, the eurozone’s second largest economy, would stagnate in the first three months of 2012.

It said that France’s industrial activity only progressed slightly during the month of January, with added slowdowns in the service sector.

The bank blamed fewer temporary work contracts and weak activity in the information technology sector as reasons for the January slowdown.

Also on Wednesday, France increased its public debt forecasts for 2012 and 2013, acknowledging the 6.6 billion euros it must pay into the eurozone permanent rescue fund.

Forecasts showed that public debt would be 89.1 percent of gross domestic product instead of 88.3 percent, originally predicated for this year.

France’s stocks remained close to desired levels, with prices continuing to increase slightly.
 

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