France Struggles to Meet Deficit Target, Says IMF Chief Economist
France’s Budget Deficit Challenge
France is facing difficulties in reducing its budget deficit to 2.7% by 2027, according to the chief economist at the International Monetary Fund (IMF). Pierre-Olivier Gourinchas emphasized the need for “a little more effort” to achieve this target. While the French government has implemented reforms regarding pensions and unemployment, Gourinchas believes that further measures are necessary to improve the country’s budgetary situation.
Reforms and Savings
The government’s recent reforms are expected to have a positive impact on France’s budget. However, Gourinchas stresses that additional efforts are required. In its 2024 budget, the French government aims to reduce debt and achieve 16 billion euros in savings. To achieve this, the government has proposed measures such as ending gas and power price caps, with the goal of saving 10 billion euros.
Moody’s Rating and Debt Reduction
The decision by Moody’s Investment Service to maintain France’s rating has been seen as a motivation to continue reducing debt and restore public finances. Finance Minister Bruno Le Maire has expressed determination to address the country’s financial situation and cut debt. The government’s commitment to this goal remains strong.
These efforts demonstrate France’s commitment to addressing its budget deficit and improving its financial standing. While challenges persist, the government is focused on implementing effective reforms and achieving the necessary savings to stabilize the country’s economy.
