Bruno Le Maire lowered French growth forecasts and announced a 10 billion euro austerity plan
This Sunday, February 18, a guest on TF1, the Minister of the Economy sharply reduced the French growth forecast, to 1% in 2024. He also announced A new savings plan of around 10 billion euros.
He had no choice now. In the context of the economic slowdown in Europe and especially in Germany, Bruno Le Maire announced a sharp downward revision of the French growth forecast on TF1 this Sunday, February 18. Bourse is now counting on an increase of 1% in French GDP in 2024, up from the previously expected 1.4%.
The adjustment makes it more difficult to keep Bruno Le Maire’s promise to reduce the public deficit to 4.4% at the end of 2024. A goal that he nevertheless says he “maintains”.
The economy minister took the opportunity to unveil a new savings plan of around 10 billion euros which should see budget cuts across all ministries.
The state will “immediately seek 10 billion euros in savings”, he declared, announcing in particular that he wants to “cut development aid by around one billion euros”.
“Every ministry will be asked to contribute,” he assured.
There is no question of the government letting the debt slip by making recovery of public money a priority for a five-year term. Bercy wants to avoid seeing France’s rating downgraded during the next agency assessment in the spring. As a reminder, the executive promised to bring the deficit below 3% in 2027 and bring the public debt down to 108.3% by the same horizon.
Bruno Le Maire is also committed, because the French are “tired of taxes” according to his words “they have done for seven years” “not to raise taxes on the French”.
Europe’s economy is slowing down
The government’s growth forecast had been in doubt for several weeks. In mid-January, the president of the Court of Auditors, Pierre Moscovici, had already set a “slightly optimistic” figure of 1.4% on the BFM business.
Various forecasting organizations were not very confident. At the end of January, IMF forecasts predicted French growth of 1% in 2024, while the OECD now sees French GDP growing by just 0.6% this year, down 0.2 points from its November forecast.
Bruno Le Maire announced the color on Thursday, giving a “serious diagnosis of the European economic situation”. “All European states are in the process of revising their growth. Germany has just done it, other euro zone member states have done it and I will do the same in the coming days,” the economy minister warned. On the same day, the European Commission also cut its growth forecast for the euro zone to 0.8%, compared with the 1.2% previously expected.
