May 30, 2024
Economy

France shrinks 2024 economic growth outlook to 1%


The country’s finance minister said in a TV interview that spending cuts will be made across every government ministry with immediate effect.

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France is dropping its GDP growth forecast for this year from 1.4% to 1% and will slash spending by about €10 billion, the country’s finance minister has said.

Bruno Le Maire announced in a TV interview on French channel TF1 on Sunday that the government will cut the budget of each ministry and certain governmental initiatives with immediate effect, to offset the sluggish growth outlook.

Doing so will enable France to keep its target of lowering its deficit to 4.4% in 2024 in its sights, the finance minister said, assuring that the government will not raise taxes. The deficit stood at 4.9% in 2023.

Le Maire put the revision down to the current geopolitical climate, highlighting Russia’s war in Ukraine, the conflict in the Middle East and economic problems in Europe and abroad.

The European Commission said earlier that it only expects 0.9% growth in France this year.

Nevertheless, maintaining aid for Ukraine will remain a priority for France’s spending, Le Maire said, as will French farmers. He added that the government could announce a revised budget if the country needs to save more.

The news of France’s wavering economic prospects will take the wind out of the sails of President Emmanuel Macron, who up until now has been betting on boosting the country’s finances through pro-business measures rather than austerity.



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