Budget minister Gerald Darmanin confirmed that the 2018 budget
to be presented on Sept. 27, the first of President' Emmanuel
Macron's administration, would be based on a forecast for growth
of 1.7 percent.
"In the coming years, it will be 1.7 percent. We hope to do
better, but we are exactly in the middle of what economists
expect," Darmanin told BFM TV.
Previous governments have faced criticism from economists for
basing their budgets and deficit-reduction targets on overly
optimistic growth forecasts.
Darmanin said that growth for 2017 was also estimated at 1.7
percent - a slight revision upwards from a previous government
forecast of 1.6 percent - in what would mark France's strongest
economic performance since 2011.
"The recovery is solid and gives us options on reducing public
spending," Finance Minister Bruno Le Maire said in a joint
interview with Darmanin in Le Monde.
Consumer and business confidence have reached levels not seen in
several years following Macron's election, as concerns about
France's stubbornly high unemployment have eased a touch.
Darmanin said the spending cuts, set to reach 20 billion euros
($24 billion) across the public sector next year, would not drag
down growth as they coincide with reforms making the economy
more competitive and less dependent on state handouts.
The government has little choice but to slash spending in order
to respect promises to reduce the public deficit from an
estimated 3.0 percent of output this year to 2.7 percent next
year, while it also aims to cut France's considerable tax
Although civil service wages are a major expense, Darmanin said
the government would reduce headcount among state employees by
only 1,600 next year, despite plans to cut the number of public
workers by 120,000 over Macron's five-year term.
Civil service unions have called a strike for Oct. 10 over
concerns about wages and a welfare tax hike that risks hitting
them particularly hard.
(Reporting by Leigh Thomas; Editing by Richard Balmforth)
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