France sees lower than expected budget deficit on economic rebound

France will cut its public sector budget deficit by more than previously expected this year and next as the economy bounces back from the coronavirus pandemic, Finance Minister Bruno Le Maire said on Thursday.

The government had initially expected the euro zone's second-biggest economy to rebound 5% this year but raised that to 6% over the summer as activity boomed after vaccinations picked up pace in the second quarter and COVID-19 restrictions were eased.

As a result, the government is building its 2022 budget on a forecast for the public deficit to come in at 8.4% of gross domestic product this year, better than a previous estimate of slightly less than 9%, Le Maire said.

While the government is maintaining its forecast for growth next year of 4%, the economic momentum from this year means that the deficit will also come in lower than expected in 2022.




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