PARIS (Reuters) – The objective of reducing the budget deficit to 2.7% in 2027 risks being “difficult” to achieve, Pierre-Olivier Gourinchas, chief economist of the International Monetary Fund (IMF), said on Saturday at the microphone from France Inter.
“Under current policies, the 2.7% (budget deficit) in 2027 will be a little difficult to achieve, there is an additional effort that would be necessary,” declared Pierre-Olivier Gourinchas.
Asked about the reforms implemented by the French government in recent months, the IMF’s chief economist indicated that they would “bear fruit” but that it would not be enough.
“All these reforms (pensions and unemployment insurance) will bear fruit, they will help support employment and therefore activity and help France’s budgetary situation in some way, but we will have to do a little more “, he added, without giving further details.
Pierre-Olivier Gourinchas, however, warned against too much austerity which could be “a recipe for a much stronger recession” when “economies are fragile”.
This observation from the chief economist of the International Monetary Fund comes as the Borne government used article 49.3 of the Constitution to adopt the first part of the 2024 finance bill in the National Assembly.
(Written by Zhifan Liu)
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