a public deficit of 2.7% in 2027 “difficult to achieve”, according to the chief economist of the IMF

2023-10-21 10:04:36

The chief economist of the International Monetary Fund, Pierre-Olivier Gourinchas, judged on Saturday “difficult to achieve” the French government’s forecast of a budget deficit of 2.7% in 2027, warning however once morest too pronounced austerity. “The budgetary path that the government has planned is going in the right direction,” he explained on France Interbut “we seem to be going a little too slowly” and “we might do a little more”.

491 billion euros in state spending in 2024

The Budget 2024, the first part of which was adopted in the National Assembly without a vote thanks to article 49.3 of the Constitution, must provide guarantees of budgetary seriousness. The text provides for total state spending of 491 billion euros, excluding debt charges, and a public deficit of 4.9% of GDP this year, then 4.4% in 2024, well off the charts. Europeans.

The Ministry of the Economy is banking on economic growth of 1% this year, then 1.4% in 2024. It plans to reduce the public deficit to 2.7% in 2027. Debt would remain stable at 109.7 % of GDP in 2024, reaching 108.1% at the end of the five-year term.

“Under current policies”, the forecast of a budget deficit of 2.7% by 2027 “will perhaps be a little difficult to achieve” and “therefore an additional effort would be necessary”, estimated Pierre-Olivier Gourinchas . The forecast for growth of 1.4% was also considered “high” by the High Council of Public Finances.

3,000 billion euros of debt in the first quarter of 2023

However, “it is not really a question of making big cuts” in spending, explained the IMF economist, inviting us to “ask the question” of additional spending and reforms. The reforms undertaken by the government “will bear fruit”, notably by supporting employment and activity, but “we will have to do a little more unfortunately”, judged Pierre-Olivier Gourinchas.

The debt has exceeded 3,000 billion euros in the first quarter of 2023 and France plans to borrow a record amount of 285 billion euros on the markets in 2024. In the evening on Friday, the rating agency Moody’s indicated that it had not updated France’s rating, which therefore remains at “Aa2”, one of the best possible, a decision which “testifies to the credibility” of the country, according to the Minister of the Economy Bruno Le Maire.

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