On February 18, French Finance Minister Bruno Le Maire said that the country has revised down its economic growth forecast for 2024 from 1.4% to 1%.
Speaking to TF1 television, Mr. Le Maire said the adjustment takes into account the new geopolitical context, including the conflict in Ukraine. He also mentioned the situation in the Middle East, the slowdown of the Chinese economy and the recession in 2023 of the German economy.
Finance Minister Bruno Le Maire added that state spending would be cut by 10 billion euros ($10.8 billion). Specifically, the government would not raise taxes or cut social security payments to citizens, but all ministries and government agencies would have to cut spending. He said operating costs would be cut by 5 billion euros across all ministries and agencies and 5 billion euros for public policies.
Mr. Le Maire added that France will not raise taxes and will even maintain plans to cut taxes for the middle class.
Jean-Rene Cazeneuve, the French parliament's budget rapporteur, said the savings would allow the country to continue reducing its debt.
The French Finance Ministry aims to reduce the budget deficit to 4.4% of GDP in 2024, compared with an estimated 4.9% of GDP in 2023.
According to Mr. Le Maire, the government is leaving open the possibility of amending the budget in the summer depending on the economic and geopolitical situation.
France's new economic growth forecast fits with a series of recent downgrades of growth outlooks by the European Commission (EC), the OECD and France's statistics agency INSEE.
On February 15, the EC cut its 2024 GDP growth forecast for France to 0.9% from the 1.2% forecast in November last year and cut its forecast for Germany to 0.3% from 0.8%.
Earlier this month, the OECD cut its 2024 growth forecast for France to 0.6% from 0.8% previously.
France's INSEE statistics agency on February 7 forecast quarterly growth of just 0.2% in the first and second quarters.
The French economy is expected to grow by 0.9% in 2023, compared with 2.5% in 2022 and 6.4% post-Covid-19 growth in 2021.
Minh Hoa (t/h according to Hanoi Moi, Vietnam+)
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