France’s economic situation has improved, but more efforts are needed for a sustained recovery and to reduce unemployment, the country’s Finance Minister Michel Sapin said on Tuesday.
In an interview to the RMC-BFM television, Sapin said the pace of the ongoing recovery is better, but not sufficient. He expects growth to be just above the official forecast of 1 percent this year. The government is aiming to achieve a growth rate close to 1.5 percent by the end of the year, he said.
On Monday, President Francois Hollande also said economic growth is likely to exceed the official forecast of 1 percent this year, but may not be adequate to bring down the country’s high unemployment.
The country’s jobless rate was 10.3 percent in the second quarter. The growth rate is expected to reach 1.5 percent next year.
Sapin said growth of 1.5 percent will prompt job creation that can lead to a sustainable reduction in unemployment. “We must continue or amplify the policies we have undertaken”, the minister added.
Hollande also announced tax cuts of more than EUR 2 billion for next year, which are intended to benefit eight million low-income households. These would be financed by more spending cuts that will be announced in the budget and hence, these will not affect the government’s deficit reduction plans.
The government expects to collect more than EUR 2.6 billion in revenue from taxes and penalties from the declaration of overseas accounts, Sapin said. This will help to fund the tax cuts announced on Monday, he added.
The number of people who declare their offshore accounts have increased after the government introduced a new system recently, the minister said.
“If we can, and will, cover part of the tax cuts for the poorest of the French by the taxes naturally paid by those who hid their money abroad, I find that this is something just and effective,” Sapin said.
Elsewhere today, the Bank of France retained its 0.3 percent growth estimated for the third quarter. The French economy stagnated in the second quarter, after expanding 0.7 percent in the first three months of the year.
The material has been provided by InstaForex Company – www.instaforex.com