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France did better on its deficit last year than planned, minister says

[PARIS] France said its 2015 public deficit will come in lower than the 3.8 per cent of economic output the government had targeted, in a rare piece of good news for a country that many in Brussels see as a serial offender on the deficit front.

Boosted by cheap oil prices and a lower euro, French economic growth of 1.1 per cent slightly exceeded the government's goal last year, boosting tax receipts while record low interest rates cut borrowing costs.

France has also tightened the screws on spending, with the central government's expenditures falling by 1.5 per cent last year, helping bring down the deficit to 70.5 billion euros, below the 74.4 billion euros initially expected. "I don't know the final number yet, but what I can tell you today is that not only was our target met, but it was even exceeded," Finance Minister Michel Sapin said on Europe 1 radio on Friday.

National statistics agency Insee will publish the final public account figures for 2015 on March 25, which will include the performance by local authorities and various welfare funds.

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France had caused consternation in Brussels in 2014 when it ditched its goal to bring the deficit in line with an EU-mandated limit of 3 per cent in 2015 in the face of a sharp slowdown in growth and a collapse in inflation.

On Friday, Sapin stuck with a pledge to bring down the deficit to 3.3 per cent target for 2016, despite a raft of downgrades by international institutions to their growth forecasts for France. "This is a goal which is also a commitment towards our European partners. This objective will be met," he said.