PARIS (Reuters) - France is to trim its growth forecast for 2014 from 1.2 percent to 0.9 percent and hike its budget deficit projections for this year and next, reflecting a slower-than-hoped recovery, Les Echos newspaper reported on Wednesday.
The government now targets a public deficit of 4.1 percent of output this year, up from an earlier forecast of 3.7 percent, and 3.6 percent next year, up from an initially projected 2.9 percent, the business daily said on its website of official 2014 budget projections due to be unveiled later.
The widely expected new forecasts, revised from April, put the government’s projections more in line with those of the European Commission and the bulk of independent economists. France will thus be taking advantage of an extra two years given by the EU to rein in its deficit to below 3 percent of output in return for commitments to economic reforms.
Les Echos said the 2014 budget plan would show that 15 billion out of the total 18 billion euros of fiscal effort in 2014 would come from spending curbs, with the remainder from a rise in taxes. The full budget is due on September 25 but headline figures are expected to be announced later on Wednesday.
Reporting by Ingrid Melander; editing by Mark John