IMF lowers forecast for French economy

Paris, June 4 (IANS) The International Monetary Fund (IMF) Tuesday lowered its forecasts for the French economy by 0.1 percentage point respectively in 2013 and 2014.

The organization said France's gross domestic product (GDP) would contract by 0.2 percent this year and grow by 0.8 percent in 2014, instead of the previous predictions of 0.1 percent contraction in 2013 and a 0.9 percent growth next year, reported Xinhua.

"We expect a gradual turnaround of economic conditions in the second half of this year, but risks of a more prolonged stagnation in Europe remain elevated," the organization noted.

Hailing Paris' recent measures of employment code and pact of competitiveness, the IMF saw "the stability of public finances requires that the consolidation effort be continued over the medium term".

"Following three years of substantial fiscal adjustment, there is scope to moderate the pace of consolidation going forward, provided the effort is concentrated on the expenditure and backed by continued structural reforms," it recommended.

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