December 16, 2018 / 8:15 PM / 10 months ago

French PM predicts budget deficit at 3.2 percent of GDP in 2019: Les Echos

French Prime Minister Edouard Philippe delivers a speech during a debate about a motion of confidence in the French government due to the "yellow vests" crisis by the left-wing members of parliaments at the National Assembly in Paris, France, December 13, 2018. REUTERS/Philippe Wojazer

PARIS (Reuters) - France’s budget deficit is likely to overshoot the European Union’s limit of 3 percent of GDP next year and stand at around 3.2 percent, Prime Minister Edouard Philippe told Les Echos newspaper in an interview.

France is expected to breach the deficit ceiling after President Emmanuel Macron made concessions to anti-government protesters earlier this month, blowing a 10 billion euro ($11.30 billion) hole in the budget.

“Our goal is to keep our promises at a maximum (...) This should allow (the government) to contain the deficit at around 3.2 percent in 2019,” Philippe was quoted as saying.

Macron announced wage increases for the poorest workers and a tax cut for most pensioners on Monday, seeking to quell a near month-long revolt by protesters dubbed the “Yellow Vests” for the bright clothing they wear on demonstrations.

Before his announcements, France’s deficit was expected to be 2.8 percent in 2019.

EU economic commissioner Pierre Moscovici said on Thursday an expected overshoot of the deficit ceiling by France could be tolerated if it was temporary.

($1 = 0.8850 euros)

Reporting by Matthias Blamont; Editing by Catherine Evans

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