Advertisement

Updated March 12th, 2024 at 15:09 IST

France's fiscal target a stretch, more cuts may be needed: Auditor

The government's objective is to decrease the public sector budget deficit to 4.4% of economic output in the current year.

Reported by: Business Desk
France President Emmanuel Macron Abortion Constitutional Right
French President Emmanuel Macron | Image:AP
Advertisement

France budget cuts 2024: France faces the risk of missing its deficit reduction target this year due to overly optimistic tax expectations, prompting the possibility of additional budget cuts, according to the public audit office on Tuesday.

The government's objective is to decrease the public sector budget deficit to 4.4 per cent of economic output in the current year. Last month, it announced an extra €10 billion in cuts to achieve this target, citing weaker-than-expected growth.

Advertisement

In its annual report, the independent Cour des Comptes audit office expressed doubt that the new cuts might suffice, urging the government to outline further measures to contain spending.

"The 2024 deficit forecast is optimistic, and even difficult to reach given the still too favourable forecasts for revenue growth," the report highlighted.

Advertisement

Finance Minister Bruno Le Maire acknowledged last week that the budget deficit for 2023 would surpass the government's target of 4.9 per cent of GDP due to lower-than-expected tax revenue.

The audit office recommended revising down tax revenue expectations, especially as the economic growth forecast for 2024 was revised downward last month to 1 per cent from the earlier projection of 1.4 per cent.

Advertisement

Despite announcing the €10 billion in cuts early into the fiscal year, their impact on the budget has been mitigated by measures aimed at supporting protesting farmers and providing extra assistance to Ukraine.

Le Maire suggested the possibility of new legislation mid-year to update the 2024 budget, potentially leading to a second round of cuts after the EU parliamentary elections in June.

Advertisement

President Emmanuel Macron's government aims to reduce the deficit to less than the EU ceiling of 3 per cent of GDP by 2027, coinciding with the end of his five-year term.

(With Reuters inputs.)
 

Advertisement

Published March 12th, 2024 at 15:09 IST

Your Voice. Now Direct.

Send us your views, we’ll publish them. This section is moderated.

Advertisement
Advertisement
Whatsapp logo