France has notified the European Commission that its budget deficit will be 3 per cent of gross domestic product in 2005, right at the limit under EU rules, the Finance Ministry today.
That limit is laid down in the European Union's Stability and Growth Pact which Paris has broken every year since 2002; the latest figure is slightly higher than the government's previous prediction of 2.9 per cent.
The Finance Ministry of France
"...this prediction confirms the government's objective of bringing the deficit below 3 per cent of GDP from 2005," the Finance Ministry said in statement.
Sources had said that tax revenues would undershoot levels fixed in the 2005 budget by €2 to €2.5 billion, less than the €4 billion figure mooted previously.
Les Echosnewspaper reported on Monday that the 2005 budget would have to be cut by €4 to €5 billion to reach the 3 per cent figure.
The paper also said Finance Minister Thierry Breton was set to announce on September 28 that the 2006 deficit will again be 3 per cent, instead of a previously forecast 2.7 per cent.
Breton is battling to keep the deficit of the euro zone's second biggest economy under control at a time of sluggish growth and has been forced to cut the official growth forecast to 1.5 to 2 per cent from a previous prediction of 2 to 2.5 per cent.
The Finance Ministry said the budget deficit projection submitted to Brussels was based on the current official growth forecast.
Prime Minister Dominique de Villepin said on Sunday the government is aiming for 2005 growth of close to 2 per cent, but private economists expect an outcome closer to 1.5 per cent.