Wednesday July 1, 03:47 AM
French budget deficit could fall in 2010: minister
PARIS (AFP) - The French government's budget deficit could fall in 2010 with a return of modest growth following a spike this year due to the global financial crisis, Budget Minister Eric Woerth said.
"The state's receipts will recover a little with the return -- modest -- of growth," Woerth said in a debate in the National Assembly on public finances Tuesday.
"Moreover, a large part of the expenses for stimulating (the economy) will disappear," he added, saying they would be reduced to 3.5 billion euros (4.9 billion dollars).
However, France's overall public deficit will likely remain where it is as any improvement in the state budget is likely to be offset by the continuing deterioration of the situation in the welfare and social budgets.
Woerth said the 2009 public deficit is now expected to hit between 7.0 and 7.5 percent of gross domestic product.
France's public deficit came in at 3.4 percent of gross domestic product in 2008 -- already above EU and eurozone rules restricting budget overspending to 3.0 percent of output.
Woerth said the state budget deficit would more than double to between 125 and 130 billion euros (175-182 billion dollars) in 2009 from 56.3 billion in 2008.
"If the deficits are deepening, it is due exclusively to the crisis," said the minister.
He said corporate tax receipts were being hit hard, with the state set to take in just 20 to 25 billion euros this year against 50 billion last year.
Last week the budget ministry issued a document saying state revenues were expected to fall by between 36 and 44 billion euros this year compared to last year, possibly hitting an 11-year low.
Not counting economic stimulus measures, "ordinary spending is being kept under perfect control," Woerth insisted, with continued reductions planned in the number of civil servants and efforts to pare health costs.
He said there were no plans to increase mandatory social contributions.
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