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French 2021 budget deficit seen lower than expected at 7% of GDP -minister -Breaking

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© Reuters. FILEPHOTO: Jean Castex, the French Prime Minister and Economy and Finance Minister Bruno Le Maire and Olivier Dussopt the Junior Minister for Public Action and Accounts walk out of the first weekly cabinet meeting.

PARIS (Reuters) – France’s stronger-than-expected economic recovery in 2013 means that public sector deficits should rise more than predicted, said the budget minister in an interview on Sunday.

Although the government planned for an economy growth of 6.25%, recent evidence suggests that this figure is closer to 6.7%.

Oliver Dussopt from the Public Accounts Ministry stated that “the strength of our growth translated into more tax revenues than anticipated and we spent less because businesses drew fewer on emergency support”. This was according to weekend newspaper Le Journal du Dimanche.

He said, “All the additional revenue goes entirely towards reducing deficit even though it doesn’t sacrifice any measures to stimulate or support the purchasing power.”

As part of its pandemic recovery plan, the government has invested 100 billion euros (or 114 billion dollars) in the economy. It also needed to provide emergency assistance for households with low incomes last year, who were struggling with an increase in inflation.

He stated that, despite the spending on stimulus and the income support, the 2021 deficit is now estimated to reach 7% of the economy’s output. The deficit was previously estimated at 8.2% by the government.

Dussopt indicated that in this context, the Finance Ministry felt confident with its prediction for the deficit to drop further this year, to 5%, and to be below the European Union’s deficit ceiling, 3%, by 2027.

He said that the recovery was stronger than anticipated and the deficit of the central government would be lower than predicted at 34.5 billion euro, or 171 billion euros.

($1 = 0.8761 euro)

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