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By Marc Joanny
PARIS, Nov 6 (Reuters) - France slashed its forecasts for economic growth and inflation next year and conceded it would overshoot the European Union's deficit limit, bringing its economic outlook closer into line with market expectations.
In a widely anticipated move, Economy Minister Christine Lagarde said the euro zone's second-biggest economy would grow by between 0.2 percent and 0.5 percent in 2009, dramatically down on the one percent expected previously.
Lagarde also lowered the growth forecast for 2010, saying it was expected to hit two percent instead of the 2.5 percent seen earlier.
Analysts have been expecting France to revisit its economic outlook given a deterioration in global growth and the world financial crisis.
On Friday, the European Commission lowered its forecasts for French economic growth to zero in 2009 and only 0.8 percent in 2010. [nL3573272]
"We did have a very weak forecast of one percent, the weakest in 24 years, we are revising it to between 0.2 and 0.5 percent," Lagarde told the upper chamber of parliament.
"We are also revising our forecast for 2010 to two percent from 2.5 percent," she said.
Prospects for the country's budget deficit also dimmed after Budget Minister Eric Woerth raised the deficit forecast for 2008 to 2.9 percent of gross domestic product (GDP) from the 2.7 percent seen originally.
The deficit would breach the EU's limit of three percent of GDP in 2009 -- when the government sees the deficit at 3.1 percent -- before easing back to 2.7 percent of GDP in 2010, 1.9 percent in 2011 and 1.2 percent in 2012, Woerth said.
Lagarde also altered expectations for inflation, saying that it would run at a rate of 1.5 percent next year rather than the 2 percent seen previously. (Writing by Tamora Vidaillet; Editing by Victoria Main)