French UNEDIC fund trims back 2014 deficit estimate

PARIS Thu May 22, 2014 12:25pm EDT

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PARIS May 22 (Reuters) - France's jobless benefits fund trimmed back its estimate on Thursday for its financial shortfall this year even though it forecast unemployment would keep rising this and next year.

The state-backed UNEDIC said its funding deficit would stand at 3.7 billion euros ($5.0 billion) this year, instead of the 4.3 billion euros it had expected in January.

That would also be a slight decrease from the 4 billion euro shortfall it booked last year and would limit its accumulated debt to 21.3 billion euros, instead of the 22.1 billion previously expected.

The fund said it also expected the deficit to fall slightly next year to stand at 3.6 billion euros, raising its debt burden to 24.9 billion euros by the end of the year.

The funding shortfall was closing more quickly than expected thanks to a reform of jobless benefits in March and because increases in the jobless total were slowing, UNEDIC said.

It forecast that the number of jobseekers nationwide would rise by 103,000 in 2014 and 60,000 in 2015 after increasing by 174,800 in 2013.

UNEDIC is financed directly by contributions from workers and employers, with any shortfall made up by borrowing. Because the state guarantees UNEDIC's bonds, its debt counts towards the total government debt but not the annual public deficit figure. ($1 = 0.7323 Euros) (Reporting by Jean-Baptiste Vey; writing by Leigh Thomas)

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