French pre-election budget: growth target 2 - 2.5 percent for next year

An export-led recovery will help France's economy to grow as much as 2.5 percent and bring the country's deficit back within EU limits in 2006 _ a year before presidential and legislative elections, France's finance minister said Wednesday.

But Thierry Breton's upbeat budget bill left economists unconvinced.

Presenting his first budget six months after taking office as finance minister, the former France Telecom boss stuck to his official economic growth target of between 2 percent and 2.5 percent for next year.

A weaker euro will help exports to increase at twice this year's rate, Breton said, powering the recovery and helping to reduce France's public deficit to 2.9 percent of gross domestic product, from this year's expected 3 percent, right on the European Union limit.

Breton said he saw France's public deficit reaching Ђ46.8 billion (US$56.2 billion) in 2006 _ up 3.5 percent from the Ђ45.2 billion (US$54.3 billion) expected this year _ but nevertheless falling as a percentage of the ambitious GDP forecast.

But Marc Touati, chief economist at Paris-based Natexis Banques Populaires, said the deficit forecast was "too optimistic" to be credible. AM