PARIS: France will achieve the smaller deficit it aims for this year but must be ready to make further significant efforts in the future to tackle rising debt, according to the International Monetary Fund (IMF).
In its Article IV review, the Washington-based institution said the country’s shortfall gap is on track to narrow to the government’s target of 5.4% of economic output this year.
It forecast growth just 0.1 points shy of the 0.7% in the public finances law.
France’s deficit will still remain around 6% of economic output in the medium term if no further action is taken, the IMF added, urging further moves to repair the public finances.
The government has pledged to reduce the gap to 3% by 2029.
“Significant additional fiscal efforts will be crucial to preserve fiscal space and create room to absorb rising spending demands while placing debt on a downward path,” the IMF said.
France is still reeling from a political crisis that prompted the collapse of the government at the end of last year and left the country without a full budget for the first months of 2025.
A new cabinet led by Prime Minister Francois Bayrou got a financial plan through parliament in February, but with a smaller consolidation than previously planned. — Bloomberg
