FRENCH finance minister Bruno Le Maire said the government had lowered its forecast for 2024 GDP growth to 1 per cent from 1.4 per cent as war in Ukraine and Gaza and a slowdown at top trading partners Germany and China darkened the outlook.
In an interview with French television TF1, he also said that state spending would be cut by 10 billion euros (S$14.5 billion) across all departments and agencies.
“It is a growth forecast that remains positive, but takes into account the new geopolitical context,” Le Maire said, citing the war in Ukraine and the Middle East, problems with maritime transport in the Red Sea, and the economic slowdown in China and Germany.
He added that there would be no tax increases and no cuts in social security payments to citizens, but stressed that all government ministries and agencies would contribute to the spending cuts.
“We will immediately cut, in the coming days, ten billion euros in state expenditures,” he said.
He said there would be five billion euros in operating expenses cuts for all ministries and another five billion in public policies, notably one billion in public aid for development, and one billion euros on residential building renovation subsidies.
Another billion will be shaved off the budgets of state operators such as export agency Business France and the ANCT agency (Agence Nationale de la Ccohésion des Territoires) for regional government policies.
Le Maire also said the government would make sure that France remained on track to respect its target of reducing the 2024 state deficit to 4.4 per cent of GDP.
“We are keeping the option of implementing a supplementary budget in the summer, depending on economic circumstances and the political situation,” he said.
