2023 growth outlook for France down to 1%

14 Sep 2022

The French government is reducing the country’s economic growth outlook for next year, but the budget deficit target doesn’t need to be amended as a result, said finance minister Bruno Le Maire.

The government now forecasts growth in France’s economy to decelerate from an estimated 2.5% this year to 1% in 2023, down from a previous figure of 1.4%, the finance minister stated.

Despite being marginally bleaker, the economic outlook for France is in stark contrast to Germany. Last week, two of the main economic institutes forecast that Europe’s largest economy would contract in 2023.

"We are keeping a positive growth forecast, but we are adjusting it to (reflect) the reality of the international situation, the energy market tensions and our trade partners' difficulties," Le Maire commented.

Even with the weaker outlook, the finance minister stated that scrapping the country’s plans to lower its public sector deficit from a forecast 5% of economic output in 2022 to under 3% in 2027 was not an option, Reuters news agency reports.

Consequently, the government would remain with plans for a deficit of 5% of GDP in 2023, due to forecasts for increased corporate tax revenues and the scrapping of a tax on businesses’ turnover over two years as opposed to one.

The finance minister added that he is relying on lawmakers to devise plans to curb the country's spending, which is one of the highest among industrialised nations.

Le Maire said inflation would stay high in December, January and February as the government gradually winds down a car fuel rebate and permits a “contained” rise in power and gas caps at the beginning of the year, the Reuters report adds.

Inflation is forecast to decline to 4.2% on average for next year, compared to 5.3% this year, the finance minister stated.