Tuesday, December 6, 2022
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France needs to start fiscal rein next year – IMF

PARIS (Reuters) – France should rein in its public finances from next year to ensure debt does not continue to pile up, the International Monetary Fund said on Monday.

In a subsequent statement during an annual staff visit, the IMF said France had succeeded in mitigating the energy crisis through gas and electricity price freezes, cash transfers to households and rebates on fuel prices. Economic hit from price shocks.

But with the 2022-2022 measures costing more than 2% of economic output, the cost is high and the government should Better focus support through a tightening phase – moving away from price controls while boosting targeted aid to the hardest-hit countries, the IMF said. It should try to reduce shortages. It suggested fiscal austerity of 25 percentage points of GDP and said some could be achieved through more targeted energy aid.

Over the medium term, the IMF expects the deficit to fall, but remain above a stable debt burden, widening the gap with the rest of Europe. And structural reforms, such as an overhaul of the pension system and unemployment benefits that the government is planning.

The IMF kept its growth forecast for France unchanged from the 2.5% in the previous WEO 2022 and 0.75% of .

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