Bercy lowers its forecast for growth in 2016, Le Figaro

The French government has lowered slightly in its draft amending budget its growth forecast for 2016, to take account of the economic results disappointing the last few months, without, however, change its public deficit goal, which will indeed be “required” according to Bercy.

The draft amended finance law (PLFR), which will be presented Friday afternoon by the Council of ministers, foresees a growth of the gross domestic product (GDP) of 1.4% this year, instead of the 1.5% previously anticipated.

According to the ministry of Finance, this downward revision is explained primarily by the one-off shocks and temporary suffered” in the spring and summer, such as strikes, the impact of the attacks on tourism, and bad harvests. “This does not change the dynamics at work for a year and a half”,-assured.

The goal of 1.5% was considered unattainable after the screeching halt in activity in the second quarter (- 0.1%) and the recovery weaker than expected in the third quarter (0.2 per cent). The figure of 1.4% is however higher than the forecasts of the OECD, the IMF and Brussels, who are betting on a rise of 1.3%.

This growth in bern, according to Bercy, does not call into question the target of public deficit, set at 3.3% of GDP this year. “The accounting information available” at this point “confirm that this objective will be met,” says the ministry, the status of recipe tax practically to the level of the forecasts.

- ‘Achievable’ -

In a notice released on Friday, the High council of public finance (HCFP), an independent body responsible for assessing the credibility of budget estimates Bercy, has been judged to be “reachable” the new growth target of the government, and “realistic” than the deficit.

The maintenance in the nails of the trajectory of public finances remains, however, “conditioned to a strict management of expenditures at year-end,” said the High council, chaired by Didier Migaud, head of the Court of auditors. This advice: “once again demonstrates the credibility and the seriousness of our action in terms of control of public accounts,” said the minister of theEconomy and Finance Michel Sapin in a statement sent to AFP.

Asked on Europe 1, the minister has also downplayed the effect of the low growth, in particular on employment. “What counts is to know +is that it has a consequence in terms of unemployment?+ No, the evidence is that it was never created as many jobs, net new jobs (..) since the crisis”, he assured.

- tax Measures -

The draft amending budget, which will be debated in the national Assembly from December 5, is expected to endorse a series of redeployments of appropriations between departments, to take account of announcements made in recent months, and tax measures, relating in particular to the fight against tax evasion.

The government should, therefore, propose the provisions of the “anti-abuse”, to avoid that some taxpayers do not evade tax of solidarity on wealth (ISF), to be paid by the richest households by placing their income in “sub-subsidiaries” of holdings.

in order To take account of a decision of the constitutional Council, the text should also propose a one-off penalty of 80%, in the case of tax adjustment, to the holders of an account that is hidden to the foreigner who does not be reported to the directors are registered trademarks.

The PLFR should finally endorse the creation account “SME innovation”, the heir to the “account entrepreneur investor” imagined by the ex-minister of theEconomy Emmanuel Macron, and is designed to promote the financing of start-ups by business angels (angel investors, accompanying young companies in their development). With this measure, which will be launched in 2017, the entrepreneurs who have realised a capital gain on the sale of their company will benefit from a conditional tax if they reinvest in an innovative company. Which will enable them, in case of ill fated investment, to rebalance their tax rate final.