Zhitong Finance and Economics learned that French Finance Minister Bruno Le Maire (Bruno Le Maire) recently said that due to the negative impact of the geopolitical war in Ukraine and the Gaza Strip and the slowdown in the economic growth of major partners Germany and most Asian economies, the French Ministry of Finance, that is, the French official level, has expected France's GDP growth rate in 2024 from 14% to 1%. In an interview, he also said that spending across all sectors and state institutions would be cut by 10 billion euros (about $10.8 billion).
"This is still relatively optimistic economic growth**, and we need to take into account the geopolitical context we are facing," Le Maire said. In the interview, he highlighted the geopolitical conflict in Ukraine and the Middle East, the difficulties of maritime transportation in the Red Sea region, and the slowdown in economic growth in Germany, an important partner and most economies in Asia.
Le Maire added that France will not increase taxes in the future and will not cut social security payments for French citizens, but stressed that all sectors and state institutions in France will make an important contribution to the cuts. "We will immediately develop plans in the coming days to cut spending by up to 10 billion euros," he said. ”
In an interview, he said that operating expenses of 5 billion euros will be cut in all sectors, and another 5 billion euros will be used for public policy, in particular public development assistance of 1 billion euros, and subsidies for the renovation of residential buildings of 1 billion euros.
Another 1 billion euros will be cut from the budgets of state operators, such as the export agency Commerce France and the National Territorial Administration for local policies.
Le Maire also said that France** will ensure that France continues to fulfill its 2024 national deficit to a deficit of 4 percent of GDP4% target. "We reserve the option of implementing a supplementary budget in the summer, which will depend on the economic environment and the political situation," he revealed in the interview. ”
It is understood that the long-term goal set by France** is to gradually reduce the fiscal deficit as a percentage of GDP in the next few years until it is below the upper limit of 3% recommended by the European Union in 2027.
In 1997, the European Union adopted the Stability and Growth Pact (STG), which aims to keep the euro's fundamentals stable. According to its rules, EU member states must not exceed 3% of their gross domestic product (GDP) and 60% of their public debt (GDP). The EU annually assesses the expenditures, revenues and investments of each Member State** and reviews their compliance with EU regulations.
France's latest data is more in line with a series of recent downward revisions to economic growth prospects by the European Commission, the Organisation for Economic Co-operation and Development and insee, France's statistical agency responsible for statistics and integration.
It is understood that on February 15, the European Commission, the official body of the European Union, will expect France's GDP growth in 2024 from 12% to 09%, taking Germany's GDP growth forecast for 2024 from 08% to 03%。
Earlier this month, the Organisation for Economic Co-operation and Development (OECD) put France's economic growth forecast for 2024 from a previous forecast of a 08% was slightly lowered to 06%。
The French National Statistics Agency (INSEE) reported on February 7 local time that the quarter-on-quarter GDP growth rate in the first and second quarters was only 02%。
The French economy grew by 09%, compared to 2 in 20225%, and in 2021, after the COVID lockdown was lifted, it achieved a whopping 64% economic growth.