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France ups 2009 deficit forecast at 79.3 bln euros

Published 12/17/2008, 01:21 PM
Updated 12/17/2008, 01:25 PM

PARIS, Dec 17 (Reuters) - The French budget deficit will be 79.3 billion euros next year, up from the government's previous estimate if lawmakers adopt proposed stimulus and investment funds, the budget minister said on Wednesday.

Woerth said last week the stimulus would bring the deficit to 70 billion euros in 2009. The 2009 budget initially forecast a shortfall of 52.1 billion euros.

"If you vote this extra credit in January, it will be 9.3 billion euros in favour of investments...The deficit would thus rise definitively to 79.3 billion euros," Eric Woerth told a hearing at the lower house of parliament.

Woerth said the public deficit, which includes government, social security and local authority spending, would reach 3.9 percent of gross domestic product, in line with the forecast from early December.

The public deficit is the one which falls under the European Union's Maastricht criteria and is supposed to be kept under 3 percent of GDP.

Earlier this month President Nicolas Sarkozy unveiled a 26 billion fiscal stimulus plan and in November, he promised to protect key companies from being swallowed up by the financial crisis with a 20 billion euros fund to help French industry.

(Reporting by Brian Rohan; Editing by Ron Askew)

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