Goldman Sachs economic growth reports

France Pledges EU-Compliant Budget; Debt to Reach 116% of GDP by 2027

Oct 7, 2024, 08:50 AM

France's government, led by President Emmanuel Macron, plans to reduce the nation's budget deficit to 3% of GDP by 2029. The French Finance Minister, Antoine Armand, announced that the government will present a budget this week that complies with European Union spending rules. France has pledged that its 2025 budget will fully adhere to EU regulations, addressing concerns from European officials who have urged France to implement additional reforms to bring down its deficit, potentially granting it three more years to achieve this goal. Despite collecting tax revenues equal to 46% of GDP, France has struggled with budget deficits worse than Italy's, with its debt ratio projected to increase to 116% of GDP by 2027. A recent Goldman Sachs Research downgrade to France's growth outlook suggests that the country may not be able to reduce its deficit below 3% of GDP until at least 2029.