French Economy Minister Antoine Armand said lower interest rates would help support business investment Mandel NGAN
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France needs to take “credible” steps to tackle its large deficit, the new finance minister said on Thursday, just before a major credit rating agency handed down its verdict on the country’s debt.
Antoine Armand told AFP on the sidelines of the annual meetings of the International Monetary Fund and World Bank in Washington, ahead of Moody’s decision on France’s credit rating expected on Friday.
The IMF predicts France’s budget deficit will be 6.0% this year and continue until 2029.
However, these figures do not include France’s recent budget proposal, which forecasts a budget deficit of less than 3% in five years.
Vitor Gaspard, director of the IMF’s finance department, told reporters on Wednesday that the IMF was “waiting to find out from the actual measures enacted in France.”
Asked about these calls for clarification, Armand said further details of the government’s plans would be announced in due course.
“It’s normal for the IMF to have to analyze line by line to understand our trajectory,” he told AFP. “And any additional spending cuts will be documented in Congressional deliberations.”
He added: “Our work over the coming months will be to monitor and fine-tune public spending to realize these savings.”
The city of Brussels has already accused France of violating budget rules, placing the country under formal procedure in July because its budget deficit exceeds the 3% ceiling that euro zone members must abide by. are.
“Our partners have a pretty accurate analysis of the situation in France, and I’ve been sharing it with them since I took office,” Armand said, adding that the French economy is “strong” and unemployment is at the lowest rate in the last 40 years. He added that it was the worst.
At the same time, “finances are a concern,” he said.
Armand pointed out that one of the government’s key plans to boost growth in the new budget is to persuade French consumers to spend more of the money they earn.
“In a world where the French save a lot, reducing the budget deficit will encourage de-saving (spending more money than you earn) to generate consumption and growth,” he said. He added that lower interest rates will support business investment.
US ratings agency Moody’s is expected to issue a verdict on French government debt later on Friday amid concerns that France could be downgraded from its current rating of Aa2, Moody’s third-highest credit score. be.
Asked whether France’s credit rating was under threat, Armand said: “We will wait and see.”
“Our debt is sustainable, it’s being purchased, it’s being financed and it’s being viewed with some quality,” he said. “If we want to maintain this situation going forward, we need to clean up our accounts and cut public spending.”
He added: “We do not decide French policy based on rating agencies.”
