Pierre-Olivier Gourinchas, the chief economist of the International Monetary Fund (IMF) said that France is unlikely to meet its target of narrowing its budget deficit to 2.7% in 2027. According to the economist, this is primarily because of the government’s current policies, with changes being necessary.
While the government of French President Emmanuel Macron is looking to reduce spending over the coming years, the current plan isn’t expected to fall below the European Union limit of 3% of gross domestic product until 2027.
Still, the IMF’s chief economist believes that the French government is on the right track to reducing the deficit. “The budget path that the government is planning is going in the right direction,” Gourinchas said, going on to suggest that “it’s perhaps moving a little too slowly.” Given that it still appears to be too early to lower interest rates given the current state of the fight against inflation, the economist suggested that the government pursue other policies to bring about faster change.