Priya Patel
TLDR:
- France likely overshot its 2023 deficit target, according to a finance ministry official.
- Finance Minister Bruno Le Maire announced spending cuts of 10 billion euros to meet the deficit target for this year.
France may have missed its 2023 deficit target of 4.9 percent of GDP, as reported by a finance ministry official on Monday. President Emmanuel Macron’s government had aimed for this deficit target, but due to slower-than-expected revenue growth at the end of the year, it may not have been achieved. The national INSEE statistics office is set to release a report on France’s national accounts in March. The warning of missing the deficit target came after Finance Minister Bruno Le Maire revised the economic growth forecast for this year from 1.4 percent to 1.0 percent. To make up for the shortfall in tax receipts, Le Maire announced spending cuts worth 10 billion euros. These cuts are intended to help the government meet its deficit target of 4.4 percent of GDP for this year. The government is also considering adjusting the budget in the summer based on economic conditions and geopolitical factors.
The European Union members had agreed on a deficit level requirement below 3 percent of GDP by 2027, but this rule has been suspended since 2020 due to the Covid pandemic and the economic impact of Russia’s invasion of Ukraine. EU members are currently in discussions to reform the deficit and debt rules to allow more flexibility. Despite missing the 2023 deficit target, France aims to reach the below 3 percent deficit level by 2027.
