IMF asks France to slow adjustment pace for growth

Paris, Aug 6 (IANS) The International Monetary Fund (IMF) has asked France, the Europe's second largest economy, to ease its pace of budgetary adjustment in 2014 in a bid to support a fragile growth recovery.

In its regular review on France's economy, the IMF Monday hailed France's "significant progress already achieved towards consolidating public finances", but recommended "a smoother pace of adjustment than envisaged in the Stability Programme to support the hesitant recovery", reported Xinhua.

"With tax rates already at a very high level, (IMF) stressed that rebalancing fiscal adjustment toward expenditure containment is critical, including in the areas of social security and local spending where there is room for improved efficiency," it added.

With a deficit gap set at 3.7 percent of economic output this year, down from 4.8 percent in 2012, the French government eyes to rebalance the ailing public finances by 2017 via a 60-billion-euro spending cut of ministerial budgets, state aid to companies and reducing local government funding.

Despite signs of gradual French growth recovery in the second half of 2013, the IMF maintained its forecast of a 0.2-percent contraction of the country's economy in 2013. It expected the figure to rise to 0.8 percent a year after.


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