France revises 2024 growth forecast down to 1%

An aerial view shows the Eiffel Tower, the city rooftops of residential apartment buildings and the Paris skyline, France, June 19, 2023. REUTERS/Stephanie Lecocq/File Photo

Paris, France — France’s Finance Minister Bruno Le Maire said Sunday the country’s 2024 growth forecast had been revised down from 1.4 to 1.0 percent, and announced spending cuts of 10 billion euros.

The revision “takes into account the new geopolitical context”, he told TF1 television, referring among other issues to the war in Ukraine.

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He also raised the situation in the Middle East, China’s “marked economic slowdown” and “a recession in 2023 in Germany”.

Weaker than expected tax receipts meant that France was going to have to make immediate savings of 10 billion euros in order to meet its budget targets.

Le Maire’s revised growth forecast aligns with other estimates. The Bank of France expects growth near 0.9 percent; the International Monetary Fund has forecast 1.0 percent; the OECD 0.6 percent.

Five billion would have to come out of the day-to-day budgets of all the ministries, he said.

The government would cut state aid and development by nearly a billion euros, and another billion euros would come out of a special budget subsidising households switching to renewable energy sources.

“We won’t be raising taxes,” said Le Maire, adding that they would even maintain planned tax cuts for the middle classes.

Jean-Rene Cazeneuve, parliament’s rapporteur for the budget, said: “The savings announced will allow us to stay on course for debt reduction.”

READ: French GDP growth slows, inflation eases

But the head of programs at France’s Climate Action Network, one of the bodies hit by the cuts, criticised the measures.

Le Maire had opted for “injustice”, said Anne Bringault, denouncing the savings she said were being made “on the back of the most vulnerable”.

“The climate and purchasing power will be the losers,” she added.

The finance ministry still aims to bring the public deficit to 4.4 percent of GDP in 2024, said Le Maire, compared to the 4.9 percent forecast for 2023.

The government was also keeping open the option of amending the budget in the summer “depending on economic circumstances and depending on the geopolitical situation”, he added.