France: the government lowers its growth forecast to 1% for 2023 – The Independent

The government has lowered its growth forecast for the French economy for 2023 but refuses to touch its public deficit target, Bruno Le Maire announced on Tuesday. The Minister of Economy and Finance, who presented the main macroeconomic forecasts on which he built the draft budget for next year, told reporters that the government now anticipates growth in gross domestic product (GDP) of France by 1% next year, against 1.4% previously, after 2.5% this year. “We are maintaining a positive growth forecast, but we are adjusting it to the reality of the international situation, to the tensions on the energy market and to the difficulties of our various trading partners”, explained Bruno Le Maire. This forecast, albeit weaker, contrasts sharply with the outlook for Germany, the eurozone’s largest economy ahead of France, where two of the country’s leading economic institutes said last week they now expect a contraction in the economy. activity next year. The Governor of the Banque de France, François Villeroy de Galhau, for his part declared last Friday that the French economy would “at least” slow down in 2023. Despite the deterioration in the economic outlook, Bruno Le Maire ruled out any abandonment of the objective of bringing the public deficit below 3% of GDP in 2027. The government is thus maintaining its forecast of a public deficit of 5% next year, with debt reduced to 111.2% of GDP against 111.5 % This year. To achieve this, the government is expecting an increase in tax revenue from corporation tax and has decided to spread the abolition of the business value added contribution (CVAE) over two years, instead to do it all at once. Bruno Le Maire said he was also expecting proposals from MPs to contain public spending during the upcoming review of the finance bill, as France has one of the highest shares of public spending in relation to GDP. so-called developed countries. The minister indicated that inflation would remain at high levels in December, January and February, while the government plans to adapt the “tariff shield” on energy prices and the “rebate” at the start of the year. at the pump on gasoline prices. Bruno Le Maire has already warned the French on Monday that they should “absorb (r) a small part” of the rise in these prices. Inflation in France, one of the lowest in the euro zone, should however slow to 4.2% in 2023, after 5.3% expected this year, said Bruno Le Maire on Tuesday.