September 20, 2017 / 8:18 PM / 9 months ago

French public deficit to rise to EU limit in 2019, Les Echos says

PARIS (Reuters) - France’s public-sector deficit is set to climb back to an EU limit of three percent of economic output in 2019 after two years below it, the newspaper Les Echos reported on Wednesday.

FILE PHOTO - French President Emmanuel Macron speaks during a press conference on the sidelines of the 72nd United Nations General Assembly at U.N. Headquarters in Manhattan, New York, U.S., September 19, 2017. REUTERS/Brendan McDermid

The government, which presents its first budget under President Emmanuel Macron’s administration next Wednesday, said this week that the deficit would fall from 2.9 percent of gross domestic product this year to 2.6 percent next year.

Les Echos reported that the deficit would increase again to 3.0 percent 2019 when an existing payroll-tax-credit scheme is transformed into a permanent cut in companies charges.

The spike has been widely expected, although previously the government had been counting on a deficit of 2.9 percent.

However, afterwards the deficit should resume its downward trend and stand at 1.5 percent in 2020, Les Echoes reported.

The Finance Ministry was not immediately available to comment on the report.

Reporting by Leigh Thomas, editing by Larry King

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