French Finance Minister Bruno Le Maire has announced ten billion euros worth of spending cuts across all government departments and agencies to offset a cut in the 2024 GDP growth forecast to 1 per cent from 1.4 per cent, RFI reports.
Le Maire said on Sunday in an interview with TF1 television:
It is a growth forecast that remains positive, but takes into account the new geopolitical context.
The minister cited wars in Ukraine and Gaza and maritime transport problems in the Red Sea, as well as a “marked slowdown in economic growth” in China and a “recession in 2023 in Germany” – both major trading partners.”
The government’s revised growth forecast is in line with other estimates, with the Bank of France expecting growth of 0.9 per cent and the OECD earlier this month cutting its forecast to 0.6 per cent from 0.8 per cent.
As a result, France will have to cut “immediately” public spending by 10 billion, Le Maire said, but the cuts will not be made by raising taxes or cutting social benefits.
Five billion euros will be cut from the operating expenses of all ministries and the remaining five from public policies, including one billion euros from state development aid and another billion from renewable energy programmes. Another billion will be cut from the budgets of state operators such as export agency Business France and regional policy agency ANCT.
Le Maire also said the government would stick to its target of reducing the public deficit to 4.4 per cent of GDP in 2024, and gradually reduce the budget deficit until it falls below the EU’s 3 per cent limit in 2027.
