France cut its budget deficit target for 2015 and announced that this year’s economic growth could beat the government’s 1% forecast, as the country posted a smaller than expected fiscal gap for 2014.
Statistics office INSEE announced that the budget gap dropped to 4% of economic output in 2014 from 4.1% in 2013, signalling economic recovery is underway.
The data “paves the way for a revision of the 2015 public deficit to about 3.8% of GDP,” Finance Minister Michel Sapin said in a statement.
The euro zone’s second biggest economy, France’s economy grew by 0.4% in 2014, the same rate of growth as see in 2013. Sapin is predicting a 1% growth for 2014.
However, France needs to take further steps to bring its economy in line, with European Union finance ministers stating this month that they had given France two more years to cut the deficit to the 3% limit.