France forecasts weak advancement subsequent year amid power disaster

PARIS (AP) — France forecasts expansion to gradual down considerably up coming 12 months in the EU&#8217s 2nd-greatest overall economy, amid fears of a recession in neighboring Germany as the financial scenario in Europe is slammed by the effect of Russia’s war in Ukraine.

France’s spending plan, offered Monday in a Cupboard meeting, is primarily based on an predicted advancement of 1% upcoming 12 months — down from an believed 2.7% this year.

As the state faces soaring electrical power and foodstuff rates, Finance Minister Bruno Le Maire stated inflation in France is envisioned to arrive at 6% in the coming months and 4% later on up coming yr.

Also on Monday, the Paris-centered Organization for Economic Cooperation and Development (OECD) mentioned it anticipates virtually flat expansion next calendar year in the 19-nation euro zone largely due to a recession in Germany, where by the gross domestic item is envisioned to contract by .7%.

The OECD&#8217s predictions set France&#8217s expansion at .6% future 12 months.

The French govt issued this month a 16 billion-euro ($16 billion) approach to cap gas and electric power cost rises in France at 15% following calendar year.

“I believe that what will make France distinct from a lot of European international locations is that the obtaining energy in 2023 will continue to maximize, especially thanks to the cap on electricity rates,” Le Maire advised a news meeting.

The expense of the measure is partially compensated for by compulsory monetary contributions from energy producers, he explained. Individuals that profit from soaring revenue will enable assistance French homes and businesses impacted by the crisis, he said.

Previously this month, the European Union&#8217s government overall body unveiled a program to cap the earnings of electric power producers that are earning extraordinary earnings because of the consequences of Russia’s war in Ukraine, stating the proposal could increase $140 billion to support persons strike by spiraling energy price ranges.

France has not launched a windfall tax on strength companies. The leftist opposition to the French governing administration is pushing for a referendum and proposed a invoice previous week to generate this kind of a tax.

Final week, French lawmakers questioned companies benefiting from electricity price hikes these kinds of as French giants TotalEnergies and Engie.

TotalEnergies CEO Patrick Pouyanné reported the firm will fork out $30 billion in taxes around the world this yr.

However in France, the group’s principal activities, relevant to refinery and providing gas, have been dropping income in preceding many years, he claimed. He extra that the rate cap of gasoline and energy in France prevents the organization from generating windfall profits in France this 12 months.


Comply with all tales about the affect of the war in Ukraine at

Sylvie Corbet And Jade Le Deley (), The Connected Press

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