French finance minister Bruno Le Maire told business reporters on Monday 27 August that France will not be able to achieve its aim of keeping the nominal public deficit at 2.3% of GDP, expecting it to rise to close to 2.6% of GDP.
Le Maire says the rise in this forecast on the French government’s initial commitments is due to a fall in the rate of growth forecast for this year to 1.7% rather than 2.0% of GDP and also by taking on the debt of SNCF Réseau.
AFP says quotes Le Maire saying that the objective for 2018 has not changed – to respect 3% of GDP for the nominal public deficit.
On Friday 22 June, the Council of the EU enacted the end of the excessive deficit proceedings for France, following a recommendation to this effect by the European Commission (see EUROPE 12025, 12045) in that for the second year in a row, the nominal public deficit should in 2018 be below 3% of GDP.
But exiting the corrective arm of the Stability and Growth Pact now obliges Paris to reduce its structural deficit by 0.6% of GDP a year. The French government will to this end, like all governments in the eurozone, unveil its draft budget for 2019 to the European Commission by 15 October, which should include measures to restrict public spending.
The speed of reforms will not fall, on the contrary, the French president, Emmanuel Macron, told French ambassadors that same day (see related article). (Original version in French by Lucas Tripoteau)