France 'probably' missed 2023 deficit target: source

A finance ministry source said France may not meet its 2023 deficit target. Photo: Joël SAGET / AFP Source: AFP

France likely overshot its budget deficit target in 2023, a finance ministry official said on Monday.

President Emmanuel Macron’s government has said it was aiming for a deficit of 4.9 percent of gross domestic product (GDP) for last year, but this will “probably be difficult to meet”, the official told AFP on condition of anonymity.

“The truth is that our revenues were much less dynamic than forecast at the end of the year,” the source said.

The national INSEE statistics office is scheduled to report on France’s national accounts in March.

The warning comes a day after Finance Minister Bruno Le Maire cut the government’s forecast for economic growth to 1.0 percent for this year from a previous 1.4 percent target.

He also told the TF1 broadcaster that he would find 10 billion euros ($10.8 billion) of spending cuts this year, citing weaker-than-expected tax receipts as the reason.

The cuts would help the government meet its deficit target for this year of 4.4 percent of GDP, Le Maire told reporters Monday.

He said, however, that 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”.

The government has said it still hopes to bring its deficit to below 3 percent of GDP in 2027.

That deficit level requirement, agreed between European Union members as part of their Stability and Growth Pact, has been suspended since 2020 first to allow countries to deal with the Covid pandemic, and then with the economic fallout of Russia’s invasion of Ukraine.

EU members are currently discussing a reform of the deficit and debt rules that would allow for more flexibility.