The French government forecast a budget deficit of 2.3 percent of gross domestic product next year, down from a projected 2.4 percent for 2007, Prime Minister Francois Fillon said Tuesday. Fillon also announced plans to stimulate the economy that include a drastic trimming of the civil servants corps, The Associated Press reported. The government plans to inject ¤10 billion (US$13.7 billion) to boost the French economy next year, along with public sector modernization and improvement in labor market mobility, Fillon told a news conference. France will begin trimming the ranks of civil servants. It will not replace the 22,700 civil servants who will be retiring _ nearly double the 12,000 who were not replaced this year, Fillon said. The announcement was in line with the government's aim of replacing only one public employee for every two who retire in a bid to trim spending. Fillon told reporters that the 2008 budget is based on an inflation-adjusted growth rate forecast to be 2.5 percent and an inflation rate of 1.6 percent. Commenting on the latest drop in unemployment, which fell to 8 percent in June, Fillon noted the rate was the lowest in 25 years but stressed that the government wants to reduce it further, to 5 percent by 2012. The government's effort is up against the weight of France's debt service burden, which the prime minister said is rising due to higher interest rates.
