France cuts 2012 GDP growth forecast

France has cut its GDP growth forecast to only 0.5 per cent from 1.0 per cent, blaming the slowdown in the Eurozone.

Prime Minister Francois Fillon announced the move as part of the country's 2012 budget, saying the cautious growth outlook would minimise future cutbacks to public spending.

He reiterated his belief that France and the Eurozone would return to growth before the end of the first half of the year.

"We are cutting the growth forecast to 0.5 percent from 1.0 percent, which allows us to take account of an economic slowdown even if we are seeing the first green shoots of recovery in Europe now," he told a news conference after meeting ministers to fine-tune a package of reforms.

Fillon said the budgetary impact of the growth reduction would be 5bn euros (£4.2bn).

The International Monetary Fund (IMF) has forecast growth of just 0.2 percent for France this year.