France will struggle to meet deficit target, says IMF chief economist

PARIS (Reuters) – France will struggle to bring down its budget deficit to 2.7% by 2027 without “a little more effort,” the chief economist at the International Monetary Fund said on Saturday.

Reforms that the government has put in place such as on pensions and unemployment “will bear fruit and help (…) with the budgetary situation in France, but it needs a bit more unfortunately,” Pierre-Olivier Gourinchas told France Inter.

In its 2024 budget, the French government is aiming to reduce debt and to make 16 billion euros in savings.

On Wednesday, the government pushed revenue legislation in the 2024 budget bill through the lower house of parliament using special constitutional powers to bypass a lawmakers’ vote, after failing to gain enough support.

The spending side of the budget bill, which is to be examined by lawmakers starting next week, includes plans for 16 billion euros in savings, with 10 billion coming from the end of gas and power price caps.

Finance minister Bruno Le Maire said that the decision by Moody’s (NYSE:) Investment Service on Friday to maintain France’s rating “strengthens our will to cut debt and my determination to restore our public finances.”