France beats deficit target


France beat its deficit-cutting target for 2011 and saw higher-than-expected consumer spending in February in a boost for president Nicolas Sarkozy's government three weeks from a presidential election.

The 2011 public deficit fell to 5.2 per cent of gross domestic product, national statistics agency INSEE said, beating both an official target of 5.7 per cent and the 5.3 per cent level that Finance Minister Francois Baroin recently said was within reach.

Consumer spending, the traditional motor of growth in France, jumped by a surprise 3 per cent in February, springing back from a decline of 0.4 per cent the previous month in a further encouraging sign for the economy.

The figures are welcome news for Mr Sarkozy, who is lagging Socialist rival Francois Hollande in opinion polls for a two-round election on April 22nd and May 6th and is vying to show that he is best placed to nurse the economy back to health.

Data earlier this week showed that GDP grew 0.2 per cent in the final quarter of 2011, averting fears that France might be headed into another recession, although there is still concern about feeble purchasing power.

"The Socialists said France was in recession, as if they actually enjoyed it every time there was bad news for France," Mr Sarkozy told Europe 1 radio, announcing the 2011 deficit figure.

"Well now we've got the results - France is the only Western country that hasn't had a single quarter of recession," he said.

Separately, producer price data showed a 0.8 per cent rise in the cost of goods going into factories, in a sign of the ongoing pressures businesses are facing, with energy and commodity prices on the rise.

INSEE data also showed that France's public debt stood at €1.72 trillion, or 85.5 per cent of GDP, at the end of 2011, missing the government's official target of 84.9 per cent for the year.