France GDP


France: France introduces new austerity measures in the 2012 budget draft

September 1, 2011

On 24 August, French Prime Minister Francois Fillon announced a new set of austerity measures, included in the 2012 budget draft expected to be approved in late September. The deficit-reduction plan entails an additional freeze of government spending, a cap on tax breaks and an increase in income tax (including a one-off levy on incomes over EUR 500,000 per year), as well as higher levies on alcohol and tobacco. The estimated spending cuts amount to a total EUR 12 billion this year and next, which would bring this year's fiscal deficit to 5.7% of GDP and to 4.5% of GDP in 2012, before narrowing further to 3.0% in 2013. The move came amid lower growth prospects for this year, which could jeopardize the government's 2011 fiscal deficit target. Official forecasts now see economic growth at 1.75% this year and next, instead of the previous 2.0% and 2.25% respectively. The downward revision comes on the back of a poor Q2 GDP result and takes into account the developments in the U.S. economic situation and the impact of the European sovereign debt crisis.


Sample Report

Looking for forecasts related to GDP in France? Download a sample report now.


France Economic News

More news

Search form