The Organization for Economic Co-operation and Development (OECD) has significantly revised down its 2008 growth forecast for France, to 1% against 1.8% previously, in its interim economic outlook, published on Tuesday. of the revision is due to the bad news that arrived in the second quarter, where we had negative growth of -1.2% at an annualized rate, while we were anticipating +0.9%”, explained Jean-Luc Schneider, deputy director from the economic department of the OECD, interviewed by AFP.
“It’s a big bad surprise and it led us to revise growth in the second half of 2008 downwards,” he said.
The OECD does not foresee a “tremendous rebound” from the third quarter, and expects France to “grow very little during the next two quarters”, continued Mr. Schneider.
However, he refused to comment on the risks that France’s budget deficit will exceed the 3% mark tolerated in the euro zone, contenting himself with saying that with this reduced growth the government’s budgetary objectives were going to be “more difficult to meet”.
On the eve of the publication of the OECD report, French Prime Minister François Fillon had admitted that French growth would be much weaker than expected, claiming to hope only “a little more than 1%” this year, which leaves casting doubt on France’s ability to curb its public deficit.
A most brutal revision since the government had until then expected growth of between 1.7% and 2.0%, but closer to 1.7%, for 2008.
The new government forecast should be officially unveiled on September 24, when the next draft budget is presented to the Council of Ministers.