Ekonomické zprávy

French government may need to make further budget cuts - auditor

The independent Cour des Comptes audit office said in an annual report that France may miss its deficit reduction target in 2024 - to 4.4% of GDP - amid overly optimistic tax expectations. Against this background, the public audit office has warned that further budget cuts may be required.

In February, the government announced additional budget cuts of 10 billion euros to meet the target due to weaker-than-expected economic growth.

Finance Minister Bruno Le Maire said last week that when calculations for 2023 are completed, last year's budget deficit will be "significantly higher" than the government's target of 4.9% of GDP due to weaker-than-expected tax revenues.

The audit service said that the government should lower its expectations for tax revenues, especially given the revision of the forecast for GDP growth for 2024 to 1% from 1.4% previously.

Le Maire said that new legislation may be needed in the middle of the year to update the budget for 2024, which will pave the way for a possible second round of cuts immediately after the EU parliamentary elections in June.

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