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France cuts 2021 growth forecast to +6% after COVID rise

PARIS, Nov 17 (Reuters) - The French government cut its 2021 growth outlook on Tuesday, after a COVID-19 resurgence forced it to impose a new lockdown.

Finance Minister Bruno Le Maire said the euro zone’s second-biggest economy was now expected to rebound 6% next year, instead of the 8% expected before France’s second lockdown.

Le Maire told reporters on a conference call that he was sticking to a forecast for a contraction of 11% this year, even though the latest data suggested it might not be that bad.

The INSEE official statistics agency estimated on Tuesday the French economy would pull back 9-10% this year, depending on how long the latest lockdown lasts.

Despite the revised growth outlook for next year, Le Maire said current forecasts for a public deficit of 6.7% of GDP and public debt of 116.2% of GDP would only be updated in December, once additional support measures for companies are fleshed out.

Businesses such as restaurants, hotels and sports clubs which were unlikely to open in December would need additional aid to compensate for operating losses, on top of a monthly handout of up to 10,000 euros ($11,872) already available to firms with less than 50 workers, he added. ($1 = 0.8423 euros) (Reporting by Leigh Thomas; Editing by Alexander Smith)

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