IMF downgrades French growth for 2012 and 2013

France plummeted in 2012 and 2013, according to the IMF

The International Monetary Fund (IMF) has lowered its growth forecasts for France in 2012 and in 2013 and therefore believes that Paris will not respect this year, or next year it’s quantified commitments to reduce the public deficit and good payday loan consolidation.

The gross domestic product (GDP) of France is expected to grow this year by 0.1%, against 0.3% expected in July, and 0.4% next year, two times less than expected this summer, according to IMF Economic Outlook released Monday.

The French government is currently forecasting 0.3% growth this year and 0.8% next year. Based on these growth assumptions, he has based a budget collective for 2012 voted this summer, as well as his 2013 budget proposal presented at the end of September, aimed at reducing the public deficit to 4.5% of GDP at the end of this year and then to 3%. , the ceiling authorized by the European treaties, a year later.

In its “Moniteur des Finances Publics” released on Tuesday, the IMF predicts that the deficit of the State, local authorities and Social Security will be rather 4.7% of GDP end 2012 and 3.5% end 2013 “If the growth was to fall significantly below the IMF’s current forecasts , ” the countries that have room to maneuver should relax their adjustments in 2013 and beyond, ” said the Fund, citing France, the countries And the United Kingdom.

Consistent public debt

As for the public debt, it should reach at the end of this year 90% of GDP, according to the IMF, a figure close to the forecast of the French executive (89.9%) and 92.1% at the end of 2013, against 91.3% provided by the government.

“Budget consolidation projects in the euro area need to be implemented. In general, attention should focus on structural fiscal targets rather than nominal targets, which may be affected by the economic situation, ” the IMF recommends.

In its draft budget, France renounces its objective of returning to the balance of the public accounts in 2017, contenting itself with a deficit of 0.3% but targeting instead a zero deficit in 2016 in “structural” terms, without the vagaries of the economic situation, in accordance with the new European treaty currently being ratified.

Majority figures have recently expressed doubts about the possibility of achieving the 3% target at the end of 2013, as France has committed to its European partners.

French Budget Minister Jérôme Cahuzac said Sunday “desirable ” that a debate takes place at European level on this goal, while ensuring that Paris, for its part, would respect its commitments. “France does not ask for anything, France has made a commitment, has pledged its word” and “no one must doubt the determination of the French authorities to be so,” he said.

Risk of aggravation of the crisis

In its “Outlook”, the Fund warns that “the possibility that the eurozone crisis worsens remains a major risk for the growth and stability of the financial sector as long as the fundamental issues are not resolved”.

The IMF forecasts an unemployment rate of 10.1% in 2012 in France and 10.5% the following year after 9.6% in 2011. The average annual inflation of 2.1% in 2011 should be 1.9% this year and decline sharply to 1.0% in 2013.

It recommends that France pursue policies leading to better competitiveness. “Among the major economies in the eurozone, policies that would lead to higher domestic demand in Germany and stronger competitiveness in France, Italy, and Spain would be beneficial,” he says.

Former EADS President Louis Gallois has been tasked by the government with a competitiveness mission and is due to deliver a much-anticipated report on 5 November. Prime Minister Jean-Marc Ayrault has promised to prepare, by the end of the year based on the conclusions of Louis Gallois, measures likely to cause a “competitive shock”.