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France revises growth, deficit targets; accord to EC forecasts

PARIS -- French Finance Minister Pierre Moscovici said on Sunday he would revise growth forecasts downwards, in line with European Commission (EC) estimates, as the eurozone's second-largest economy struggles to meet economic targets.

The Socialist government had previously said its growth target could be too optimistic and acknowledged it will miss a 2013 goal of bringing its deficit down to 3 percent of output, urging Germany to grant it more time to meet the target.

Speaking on Europe 1 radio, Moscovici said Paris had decided to offer the European Commission “prudent and realistic estimations” when it presents its new growth and deficit forecasts in mid-April.

France's economy shrank by 0.3 percent in the fourth quarter of 2012, official data showed last month, as rampant unemployment weighed on household spending.

Moscovici said the forecast for GDP growth would be 0.1 percent rather than the 0.8 percent on which the government built its budget for 2013.

“It's the figure given by the European Commission, it's the figure given by France and I believe it corresponds with what we can actually achieve at least,” Moscovici said.

He said that 2014 growth would be revised to 1.2 percent from 2 percent and hoped it would rise to 2 percent in 2015.

The new forecasts are in line with the Commission's pessimistic view, as President Francois Hollande struggles to reverse a rise in unemployment, above a 13-year high.

Moscovici confirmed the deficit-cutting timetable would target 3.7 percent of GDP by the end of this year with a view to hitting the EU's 3-percent goal in 2014.

“I think we have to base ourselves on these figures,” he said. “We could do a little more ... I hope it will be more.”

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In this March 27 picture, French Finance Minister Pierre Moscovici talks during a press conference at the Economy Ministry in Paris. Moscovici said on Sunday, April 7 that he would revise growth forecasts downwards, in-line with European Commission estimates, as the eurozone's second-largest economy struggles to meet economic targets. (AFP)

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