IMF invites France to tighten its fiscal policy next year next year

The expenses incurred by Paris, in particular to compensate for the consequences of the energy crisis on companies and households, weighed on public finances already very degraded by the pandemic of COVVI-19.


Gel of electricity and gas prices, energy checks, put on fuel prices, support for businesses and households … For the past year, France has multiplied the expenses and disbursements of billions to help consumers to consumers Facing the pricing. In a Report published Monday, November 21, the International Monetary Fund (IMF), however, believes that Paris must start to clean up its finances, and this year Next.

France’s expenses, evaluated by the IMF to more than 2 % of its GDP, weighed on public finances already very degraded by the Pandemic of COVID-19, during which the government notably financed partial unemployment and shop closings under “whatever it costs”.

After these two crises and when aid linked to the pandemic have faded, “it is justified to start budgetary consolidation in 2023”, writes the IMF in the conclusions of an economic assessment mission France, known as “article IV”.

Now, this is not the path that Paris takes, notes the Washington institution, noting that “the 2023 finance law does not target a reduction in the deficit, postponing budgetary adjustment to 2024”. The government is counting on a public deficit of 5 % next year, after 4.9 % this year,

fear of a “slight digging of the deficit”

In its document published Monday, the IMF, which is still expecting growth of 0.7 % next year in France, fears “a slight digging of the deficit” in 2023, citing the extension of energy measures and prosecution the abolition of production taxes for businesses.

However, targeting of energy aid could, “largely”, allow a budgetary tightening of a quarter of GDP, calculates the IMF, also citing a possible postponement of production tax reductions.

In the longer term, the French deficit should remain above the level at which it stabilizes the debt, also anticipates the IMF, which fears an “already important” gap with comparable European countries.

He calls for “sustained adjustment” to reduce the deficit to 0.4 % of GDP by 2030, based on the reduction in the growth of current expenses, especially those related to the pandemic and to The energy crisis.

The International Monetary Fund also emphasizes structural reforms, through the decline in the retirement age, the completion of the unemployment insurance reform, the rationalization of certain expenses ( fossil or housing fuels), and that of public service staff.

/Media reports cited above.