PARIS, Sept 26 (Reuters) - France will run up a deficit of 8.2 percent of gross domestic product in 2009 and the economy will contract 2.25 percent, French Prime Minister Francois Fillon was quoted as saying on Saturday.
However, Fillon told Le Journal du Dimanche newspaper that he expected the economy would grow 0.75 percent in 2010, and predicted that the annualised growth rate would climb back to around 2 percent during the course of the year.
The centre-right government is due to present its 2010 budget on Sept. 30. Fillon said that although some tax loopholes would be closed and some public sector jobs axed, stimulus measures to help the economy would remain in place.
'The 2010 budget will be aimed at the recovery,' he said in the interview, released ahead of Sunday's publication.
The eurozone's second largest economy registered a deficit of 3.4 percent of GDP in 2008, but its accounts have plunged deep into the red due to a slump in tax receipts and a government stimulus package primarily aimed at investment.
Fillon said the deficit would total 140 billion euros ($206 billion) this year, 'all accounts put together', before easing back to 115 billion euros in 2010.
He said France had fared better than expected during the global downturn, but noted that unemployment was still rising.
'It is going to continue to increase in the first half of 2010, even if the rate will slow,' he said, adding that jobs would be created when growth returned to the 2 percent level.
According to the latest data from the European Union statistics office, the French unemployment rate rose to 9.8 percent in July from 9.6 percent in June.
The economy grew, if only by 0.3 percent, in the second quarter of the year, meaning France has come out the other end of the recession.
Fillon said the government planned to phase out a popular car incentive scheme that has provided a 1,000-euro reduction to people swapping old cars for newer models. This will fall to 700 euros on Jan. 1 and to 500 euros on July 1.
He also confirmed the government would introduce a carbon tax next year and would increase taxes on generous pension payouts. Taxes would be imposed on all capital gains on property sales, rather than just a portion as at present.
However, he distanced himself from a controversial proposal to impose a tax on sick pay, saying this much-discussed measure was not included in the 2010 budget.
(Reporting by Crispian Balmer; editing by Michael Roddy) ($1=.6810 Euro) Keywords: FRANCE BUDGET/ (crispian.balmer@reuters.com ; +33 1 49495242; Reuters Messaging: crispian.balmer.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
However, Fillon told Le Journal du Dimanche newspaper that he expected the economy would grow 0.75 percent in 2010, and predicted that the annualised growth rate would climb back to around 2 percent during the course of the year.
The centre-right government is due to present its 2010 budget on Sept. 30. Fillon said that although some tax loopholes would be closed and some public sector jobs axed, stimulus measures to help the economy would remain in place.
'The 2010 budget will be aimed at the recovery,' he said in the interview, released ahead of Sunday's publication.
The eurozone's second largest economy registered a deficit of 3.4 percent of GDP in 2008, but its accounts have plunged deep into the red due to a slump in tax receipts and a government stimulus package primarily aimed at investment.
Fillon said the deficit would total 140 billion euros ($206 billion) this year, 'all accounts put together', before easing back to 115 billion euros in 2010.
He said France had fared better than expected during the global downturn, but noted that unemployment was still rising.
'It is going to continue to increase in the first half of 2010, even if the rate will slow,' he said, adding that jobs would be created when growth returned to the 2 percent level.
According to the latest data from the European Union statistics office, the French unemployment rate rose to 9.8 percent in July from 9.6 percent in June.
The economy grew, if only by 0.3 percent, in the second quarter of the year, meaning France has come out the other end of the recession.
Fillon said the government planned to phase out a popular car incentive scheme that has provided a 1,000-euro reduction to people swapping old cars for newer models. This will fall to 700 euros on Jan. 1 and to 500 euros on July 1.
He also confirmed the government would introduce a carbon tax next year and would increase taxes on generous pension payouts. Taxes would be imposed on all capital gains on property sales, rather than just a portion as at present.
However, he distanced himself from a controversial proposal to impose a tax on sick pay, saying this much-discussed measure was not included in the 2010 budget.
(Reporting by Crispian Balmer; editing by Michael Roddy) ($1=.6810 Euro) Keywords: FRANCE BUDGET/ (crispian.balmer@reuters.com ; +33 1 49495242; Reuters Messaging: crispian.balmer.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.