PARIS (MNI) – France’s outstanding gross public debt rose E43.2
billion in 2Q to E1.833 trillion, amounting to about 91.0% of GDP, up
1.7 points from 1Q, the national statistics institute Insee estimated
Friday.
The increase came from the central government, where the debt
increased by E51.3 billion to E1.433 trillion, including E9.8 billion in
loans from the EFSF to Eurozone bailout countries. In net terms, the
quarterly rise was smaller, as cash holdings jumped by E16.6 billion.
The indebtedness of the social security system declined by E8.2
billion in 2Q to E228.4 billion, though cash holdings also dropped, by
E7.5 billion.
Local governments increased outstanding debt by a slender E400
million to E161.3 billion. Other administrations trimmed their debt by
some E300 million to E9.7 billion.
The government aims to reduce its budget deficit to 3% of GDP in
2013 after a targeted ratio of 4.5% this year. Even if it succeeds, the
debt ratio will continue to mount next year. However, the government is
expected today to confirm that it is slashing its 2013 growth target to
0.8% from 1.2%, a downgrade that comes on top of already stagnant GDP –
at best – this year.
The lower growth not only will make it tougher for the government
to hit its deficit target, as revenues decline, but will also depress
the denominator of the debt-GDP ratio, making it doubly likely that the
ratio will be higher than previously expected.
[TOPICS: M$F$$$,M$X$$$,MGX$$$]
