I no longer had any other option. In a context of economic slowdown in Europe, and particularly in Germany, Bruno Le Maire announced this Sunday, February 18 on TF1, a strong downward revision of French growth forecasts. Bercy now expects French GDP to rise by 1% in 2024, up from 1.4% previously forecast.
This adjustment makes it mechanically more difficult to fulfill Bruno Le Maire’s promise to reduce the public deficit to 4.4% by the end of 2024. An objective that, however, he says “maintain.”
The Minister of Economy took the opportunity to unveil a new savings plan of around 10 billion euros that should involve budget cuts in all ministries.
“Each of the ministries will be called to contribute,” he assures.
There is no doubt that the government will let the debt slip, having made the recovery of public finances a priority for the five-year period. Bercy also wants to prevent France’s rating from being downgraded during the agencies’ next evaluations in the spring. As a reminder, the executive promised to bring the deficit below 3% in 2027 and the public debt to 108.3% in the same horizon.
Bruno Le Maire also committed, as “he has been doing for seven years”, in his words, “not to increase taxes on the French” because the French “are fed up with taxes.”
The European economy is slowing
The government’s growth forecasts had been in doubt for several weeks. In mid-January, the president of the Court of Auditors, Pierre Moscovici, already considered the figure of 1.4% “a little optimistic” in BFM Business.
The various forecasting organizations were no longer confident. At the end of January, IMF projections predicted French growth of 1% in 2024, while the OECD now expects French GDP to rise by just 0.6% this year, 0.2 points lower than its November forecast.
Bruno Le Maire announced the color on Thursday by presenting “a severe diagnosis of the European economic situation.” “All European states are in the process of reviewing their growth. Germany has just done it, other member states of the euro zone have done it and I will also do it in the coming days,” warned the Minister of Economy. On the same day, the European Commission also lowered its growth forecast for the euro area, to 0.8% compared to the 1.2% forecast until now.
Source: BFM TV
