PARIS (MNI) – France’s public borrowing is projected to reach E182
billion in 2012, while medium- and long-term debt issuance net of
buy-backs will amount to E179 billion next year, the French Treasury
(AFT) said Wednesday.
Included in next year’s borrowing requirement is a projected 2012
deficit of E81.8 billion plus E98.9 billion more to cover redemptions
falling due, AFT said. The agency added that further details of the
funding program would be released in December.
The Treasury also confirmed this year’s deficit would reach the
previously forecasted level of E95.5 billion, and that medium- and
long-term net issuance in 2011 would be E184 billion, as previously
estimated.
The narrowing of the budget deficit next year is projected at
14.3%, just short of the 14.5%-14.6% drop reported earlier by French
newspapers.
The government issued a statement after the cabinet meeting today
in which it declared that reducing the public debt was a priority and
that it begins with cutting the public deficit. The statement reiterated
that the French deficit is expected to narrow from 5.7% of GDP this year
to 4.5% in 2012 before hitting 1% by 2015.
France’s debt ratio would begin to decline in 2013, edging down to
87.3% of GDP from 87.4% in 2012. The 2012 figure would be an increase
from the expected 2011 ratio of 85.4%.
The government Wednesday also reconfirmed its growth forecast of
1.75% for both 2011 and 2012. Some analysts complain the projection is
still too optimistic, despite a downward revision earlier this month
from previous forecasts of 2% for 2011 and 2.25% for 2012.
The government also projected a decline in spending volume of 0.5%,
a saving of E1.8 billion, taking into account the implemention of “extra
efforts” from the state’s anti-deficit plan.
Excluding debt and pension payments, total state spending is
expected to remain at E275.6 billion, in line with the 2011 level, the
cabinet statement said, adding that levels would decline through
additional measures to be decided in parliamentary discussions.
“This unprecedented effort to control state spending is made
possible through reforms put in place since 2007, as part of the general
revision of public policies,” the government statement read.
Tax revenues are projected to rise 7.5% from 2011 to E273.1
billion, the government said. Conversely, financial aid to France’s
overseas territories, which are also looking to reduce their deficit
levels, would be left unchanged, the government added.
–Paris bureau, +331-42-71-55-40; paris@marketnews.com
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