* President sees early positive effects from reforms
* Says time has come for a "pause" in tax increases
PARIS Aug 30 President Francois Hollande
indicated he was more optimistic over France's economic outlook
next year, though he stopped short of committing his government
to a new target.
Hollande told the daily Le Monde that a series of reforms
conducted since he took office 15 months ago were producing
positive effects on the economy and would keep building
The government's 2014 growth forecast is currently 1.2
percent, but Les Echos newspaper has reported that it has been
working with an unpublished estimate around 0.8 percent as it
drafts its budget for next year.
"I wager that we will be able to raise the 2014 growth
forecast slightly," Hollande said in an interview with Le Monde.
A presidential aide told Reuters that Hollande had based his
remark on the 0.8 percent estimate as suggested by Les Echos.
The Bank of France earlier this month doused hopes of a
quick economic rebound when it published a forecast for growth
of just 0.1 percent in the third quarter, citing weak domestic
demand as a slowing factor.
Second-quarter growth was a relatively robust 0.5 percent,
though economists have raised doubts about whether that pace can
be kept up because much of that growth was based on one-off
factors like energy production in cold weather and firms
Hollande is fighting to kickstart growth through tax credits
for companies while battling to bring down record joblessness,
but his efforts are being complicated by EU-imposed
belt-tightening aimed at shrinking the public deficit.
The Socialist president said he recognised growing
frustration among business leaders with plans to hike corporate
taxes in the 2014 budget, saying it was time to ease off hikes.
"Thanks to the major savings achieved, the time has come for
a pause (in tax rises) - earlier than we had foreseen," he said.
Finance Minister Pierre Moscovici sought on Thursday to
address anger over high taxes, telling business leaders the
increases to be unveiled in an amended 2014 budget next month
would be less severe than expected.
The government this week outlined the terms of an overhaul
of its pension system that will gradually extend the pay-in
period to 43 years by 2035 while also nudging up pension
contributions paid by workers and employers.
But that reform, like an overhaul of rigid labour rules
earlier this year, has been criticised by some economists as
being too cautious and failing to fix longstanding structural
"Never before, in the space of 15 months, has France
undertaken as many structural reforms," said Hollande. "These
are big steps, judging from the distance covered."