France’s government should implement new savings measures

France’s government will be forced to initiate new savings measures on the background of forthcoming presidential elections in 2017. Thus the government will be able to fulfill its promises and lead budget deficit to given standards, mentions the Eurocommission in a report released this week.

The Eurocommission notes that budget deficit in France will decrease to 3.2% of GDP in the next year and to 3.4% of GDP this year. If France’s government implements additional measures of stimulation or increases incomes, reduction of deficit will have more significant figures.

These forecasts are an additional pressure on President Francois Hollande who has already got a status of the most unpopular president in the history of France on the background of high unemployment, weak economic growth, and low budget spending. Mr Hollande has recently stated that current situation in the country was on the way of improvement. At that time, the government notes about an intention to cut deficit below 3% which is an upper limit in the EU.

France’s government remarks that the Eurocommission did not take into account measures of spending limits put in budget for 2017 during calculation of its forecast. Forecasts do not reflect stronger-than-expected growth of GDP in Q1. Such tendency creates a stable ground for stabilisation of economy and government finances. According to government’s GDP forecast, it is expected a growth by 1.5% this year, while analysts at the Eurocommission expect it to rise by 1.3%.