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France will do more on spending if growth disappoints, says Le Maire

PARIS – French Finance Minister Bruno Le Maire committed on Thursday to taking further action to keep government spending in line with budget plans if economic growth proves weaker than expected.

The government aims to cut its public sector budget deficit from 4.9% of output this year to 4.4% next year before only gradually falling in line with an EU limit of 3% in 2027.

But the International Monetary Fund and France’s own public audit office have raised questions about the pace of reduction, even if growth meets the 1.4% rate the government has built its budget plans on and which some economists say is too optimistic.

“I am prepared to take new and further decisions on the public expenses if the level of growth is not the one that we are expecting. This is my responsibility,” Le Maire told the Reuters NEXT conference in New York.

Speaking from Paris, Le Maire said that if there is an economic slowdown or if a geopolitical crisis impacts French growth that all the necessary decisions were ready to be enacted in order to stick to next year’s 4.4% deficit target.

“This is my target, I will stick to my commitment, this is a matter of credibility.”

Le Maire did not say what form any possible decision would take, but this year he asked ministries to come up with billions of euros in unplanned budget savings to keep France’s deficit-reduction plans on track.

To view the live broadcast of the World Stage go to Reuters NEXT news page: REUTERS

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