Sep 28, 9:56 AM EDT

French government plans tax cuts in its 2017 budget

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AP Photo/Christophe Ena

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PARIS (AP) -- The French government has presented a 2017 budget plan that includes 1 billion euros ($1.1 billion) in tax cuts expected to benefit 5 million low and middle-income households.

The budget detailed at a Cabinet meeting Wednesday is based on expected economic growth of 1.5 percent both this year and next. The International Monetary Fund forecasts a more modest 1.2 percent growth next year.

Finance minister Michel Sapin stressed Britain's decision to leave the European Union in June has "unclear" consequences on France's economic situation.

The government vows to bring the deficit to 2.7 percent of gross domestic product, which would be within the EU limit of 3 percent for the first time since 2007.

President Francois Hollande said this goal is "credible and serious," in comments reported by government spokesman Stephane Le Foll.

The EU has already granted France a delay of two years twice - in 2013 and 2015- to reach its deficit target.

The government is also trying to be more business-friendly through 5 billion euros in company tax cuts aimed, in the hope of boosting hiring.

The economy is expected to be a major concern for French voters ahead of the presidential election in April-May 2017. Unemployment has been hovering around 10 percent for years.

The budget will be debated this autumn in parliament. Several candidates in the presidential electoral campaign have claimed they would reconsider the budget if elected.

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