CLEAN : France set to revise targets

The government is reconsidering its commitment to maintaining a public deficit of 3% of GDP by 2013, which was previously emphasized. While this decision may prevent further budgetary tightening that could harm economic activity, it also means the deficit target will not be met. France's structural effort in 2013 is significant, with a budgetary effort of around 36 billion euros, which is challenging in a bleak economic climate. The risk of the economy slipping into recession is high, and further austerity could ensure this outcome. The government's credibility is more at risk regarding its growth forecast of 0.8%, which is higher than most economic predictions. With new data, especially from Q4 2012, the government is likely to revise its growth forecast downward.

What is the positive outcome of the government's decision to relax the deficit target?

• Increased public spending

• No additional budgetary tightening

• Higher economic growth

• Lower taxes

What is the main risk if France increases austerity measures?

• Higher inflation

• Economic recession

• Increased unemployment

• Lower public spending

How much is France's budgetary effort in 2013?

• 20 billion euros

• 36 billion euros

• 50 billion euros

• 10 billion euros

What is the government's growth forecast for 2013?

• 0.5%

• 2.0%

• 0.8%

• 1.5%

Why might the government revise its growth forecast downward?

• To meet the deficit target

• To align with higher inflation rates

• Because of lower economic forecasts from other sources

• Due to increased public spending