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French President Nicolas Sarkozy adjusts his tie, before addressing reporters during an interview on French television at the Elysee Palace in Paris, Sunday Jan. 29, 2012 Lionel Bonaventure/AP/Press Association Images

France cuts 2012 growth forecast to 0.5 per cent

The second largest economy in the eurozone has halved its growth projections for 2012 – but insists that it will return to growth next year.

FRANCE HAS CUT it growth forecast for this year by half – from 1 per cent to 0.5 per cent – according to the country’s Prime Minister Francois Fillon.

Speaking to reporters today, Fillon said the government had revised France’s growth forecast for 2012 after taking note of the “economic slowdown”- despite the fact that “the first green shoots of recovery” were currently being seen in Europe.

Fillon said the country’s economy was expected to return to growth, along with the euro itself, during the first half of next year, Reuters reports. No further austerity measures would be required, he added.

Last week, the International Monetary Fund also revised France’s growth forecast downward – and had a less optimistic growth forecast for the country – bringing it from 1.4 per cent to just 0.2 per cent, reports the BBC.

Meanwhile, the country’s President Nicolas Srakozy yesterday unveiled his plans to help bring the country’s finances back on track with the introduction of the so-called ‘Robin Hood’ tax of 0.1 per cent on financial transactions, which is due to be introduced in August as part of a package of measures to promote growth and create jobs.

The announcements come just three months ahead of the French presidential election.

Read: Sarkozy says he will impose a French ‘Robin Hood’ tax>

Read: Bailout costs likely to rise after S&P downgrades EU fund>

Read: S&P runs riot in the eurozone: France loses AAA rating as Portugal turns to junk>

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