France received more worrying economic news Thursday as it was revealed the country’s trade deficit had widened by over 12 percent in July.
France’s Customs Office said that in July the deficit expanded by just over USD 9.0 billion and now stood at over USD 94 billion.
The news adds to government concerns over high deficits and growing national debt.
France has announced a mini-austerity package that would increase some taxes and cut public expenditures but Parliament has been watering down some of the proposed measures and economist say the initiatives are too weak to have a major impact.
Additionally, last month the government revised downward the official government growth forecast for 2011, shaving it back to 1.75 percent expansion of Gross Domestic Product (GDP) from earlier projections of 2.0 percent.
For 2012, the government now says the economy will only grow by 1.75 percents for the second year runnin, compared with a prior forecast of 2.25 percent.
President Nicolas Sarkozy, who is in an election year, is currently pushing for adoption of a “Golden Rule” to balance the budget by 2013.
Other European Union countries are also expected to be encouraged, as has Germany, to adopt such an initiative and reduce deficits.