Canadian Manufacturing

France barely escapes new recession after missing deficit targets

The French economy avoided sinking into a new recession but the overall prospects for growth are grim



PARIS—France’s state statistics agency says the deficit shrank less than expected last year, and debt continued to grow to 93.5 per cent of GDP.

The figures released Monday are the latest sign of trouble for the unpopular Socialist government, expected to be replaced imminently.

The Socialists suffered a blow in nationwide municipal elections Sunday amid widespread disappointment at President Francois Hollande’s handling of the stagnant economy and persistently high unemployment.

The Insee statistics agency says the deficit was 4.3 per cent in 2013, above the 4.1 per cent the government had promised and above EU targets.

The French economy avoided sinking into a new recession, growing 0.3 per cent in the fourth quarter, up from a 0.1 per cent drop in the previous quarter. But the overall prospects for growth are slow.

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