PARIS (Reuters) – France is unlikely to meet its public deficit reduction targets, which it has already revised upwards, and must make additional efforts to bring its debt back on a downward trajectory, the Monetary Fund said on Thursday international (IMF).
In its review devoted to France, the IMF estimates that the budget deficit will reach 5.3% of gross domestic product (GDP) this year and will decrease to 4.5% in 2027.
This is well beyond the government’s objectives, which forecast a deficit of 5.1% this year and to return below the threshold of 3% – the limit set by the European Union – in 2027.
The executive was forced to revise its deficit reduction targets last month in the face of tax revenues for 2023 that turned out to be significantly lower than forecast.
“New fiscal consolidation measures are recommended in the medium term starting in 2024, in order to bring the debt back on a downward trajectory, while leaving room for targeted spending promoting growth,” comments the IMF.
The fund estimates that in the absence of additional measures, public debt will reach 112% of GDP this year.
The IMF forecasts French GDP growth of 0.8% in 2024 and 1.3% in 2025, thanks in particular to a resumption of household spending with the decline in inflation.
The government, for its part, forecasts growth of 1% this year and 1.4% next year.
(Written by Leigh Thomas, Blandine Hénault for the French version, edited by Kate Entringer)
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