IMF Warns France To Cut Debt, Sees Higher Deficit

Fahad Shabbir (@FahadShabbir) Published May 23, 2024 | 01:50 PM

Paris, (APP - UrduPoint / Pakistan Point News - 23rd May, 2024) The IMF urged France on Thursday to take more measures this year to reduce its debt load, warning that the budget deficit will be sharply higher than forecast in 2027.

The IMF said in a statement that France's deficit will reach 5.3 percent of gross domestic product this year, slightly higher than the 5.1 forecast by the government.

But the Washington-based institution warned that France's budget shortfall will be "significantly higher" than Paris foresees in 2027 -- the IMF forecast 4.

5 percent instead of the 2.9 percent expected by French officials.

"Further consolidation measures are recommended over the medium term, starting in 2024, to bring debt on a downward trajectory, while making space for targeted growth-enhancing spending," the IMF said at the end of a staff mission to France.

The statement follows warnings from ratings agencies that France needs to undertake additional spending cuts to meet its deficit target.