France lifts 2021 deficit and debt forecasts

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FILE PHOTO: French Economy and Finance Minister Bruno Le Maire speaks at a press conference to present details of new restrictions aimed at curbing the spread of coronavirus disease (COVID-19 ), announced the day before by the president, in Paris, France, October 15, 2020. Ludovic Marin / Swimming pool via REUTERS / File Photo

PARIS (Reuters) – France’s public deficit is expected to reach 9% of gross domestic product (GDP) in 2021, French Finance Minister Bruno Le Maire said on Sunday, against a previous forecast of 8.5% as the country enters its third national coronavirus containment.

This change follows a downward revision of France’s growth forecast from 6% to 5% for this year, given the effect of new restrictions put in place throughout April to combat the COVID-19 pandemic. Schools are on the verge of closing and non-essential stores have closed.

The Mayor, speaking on LCI TV, said France’s public debt is expected to reach 118% of GDP this year, up from his latest forecast of 115%. In another previous estimate, Le Maire said in December that public debt could reach 122% of GDP.

Like many countries in Europe, France has invested billions of euros to support struggling businesses with state-guaranteed loans as well as to help them with rents and short-time working arrangements.

President Emmanuel Macron had hoped to get France out of the pandemic without having to impose another general stop, sparing the economy another hard blow, but cases of COVID-19 and hospitalizations have increased in recent weeks.

Reporting by Sarah White; Editing by Andrew Cawthorne

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