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France Public Debt Rises To 89.3% In Q1

6/29/2012 5:52 AM ET

France's general government debt rose for the second consecutive quarter to EUR 1.789 trillion in the first three months of the year, data released by the statistical office INSEE showed Friday.

In the fourth quarter of 2011, the debt figure was EUR 1.717 trillion, while it was EUR 1.649 trillion in the same period last year.

As a percentage of GDP, public dent was 89.3 percent in the first quarter, up from 86 percent in the previous three months. In the first quarter of 2011, it was 84.5 percent.

One of the reasons behind the increase in debt was the EUR 9.1 billion that France contributed to the euro area rescue fund EFSF, INSEE noted.

Yesterday, Prime Minister Jean-Marc Ayrault said the government would cut spending across ministries and reduce public sector staff in a bid to reduce the ballooning deficit.

Accordingly, ministries other than health, education and interior are likely to see staff reduction of as much as 2.5 percent annually. Spending by ministries are expected to be cut by 7 percent next year.

Ayrault is set to present an updated budget next week that is likely to include several tax hike proposals.

Latest data released by INSEE confirmed today that the French economy stagnated in the first quarter of the year, following a modest 0.1 percent expansion in the previous three months.

by RTT Staff Writer

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