France cuts 2024 growth forecast as outlook darkens

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 (Reuters) -French Finance Minister Bruno Le Maire said the government had lowered its forecast for 2024 GDP growth to 1% from 1.4% as the conflicts in Ukraine and the Middle East and a slowdown at top trading partners Germany and China darkened the outlook.

French Minister for Economy, Finance, Industry and Digital Security Bruno Le Maire delivers a speech during the inauguration of a new hub in France dedicated to the artificial intelligence (AI) sector, at the Google France headquarters in Paris, France, February 15, 2024. REUTERS/Gonzalo Fuentes

In an interview with French television TF1, he also said that state spending would be cut by 10 billion euros across all departments and agencies.

He added that there would be no tax increases and no cuts in social security payments to citizens.

The new government forecast is more in line with a series of recent growth outlook downgrades by the European Commission, the OECD and French statistics agency INSEE.

The European Commission on Feb. 15 cut its 2024 GDP growth forecast for France to 0.9% from the 1.2% seen in November, and it cut its forecast for Germany – the EU’s biggest economy – to 0.3% from 0.8%.

Earlier this month, the Paris-based Organisation for Economic Cooperation and Development cut its 2024 French growth forecast to 0.6% from 0.8% previously.

France’s official statistics agency INSEE on Feb. 7 forecast that the euro zone’s second-biggest economy was set to expand just 0.2% in the first quarter from the previous three months, when it flatlined, and that it would maintain that rate in the second quarter.

(Reporting by Elizabeth Pineau and Geert De Clercq; Editing by Hugh Lawson and Angus MacSwan)