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3d ago

IMF Urges France to Pair Spending Cuts with Reforms to Address Rising Debt

The IMF endorses France's deficit targets but warns that without structural reforms, debt will continue to rise until 2030.

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Réforme des retraites ou assurance chômage: les pistes du FMI pour limiter la dette publique française

Overview

  • The IMF's latest report validates France's 2025 deficit target of 5.4% and its commitment to reduce the deficit below 3% by 2029.
  • Without significant additional measures, France's public deficit is projected to remain near 6% of GDP, with debt increasing until 2030.
  • The IMF advises against relying solely on tax increases, warning this could harm business confidence, household consumption, and economic growth.
  • Recommendations include a structural fiscal adjustment of 1.1% of GDP in 2026 and reforms to unemployment insurance and pensions to improve fiscal sustainability.
  • The French government, led by Éric Lombard, is preparing a €40 billion savings plan for the 2026 budget, with detailed proposals expected by July 14.