French govt adviser warns of difficulty cutting budget gap to 3% in 2027, paper says

Cutting the French budget deficit to the equivalent of 3% of gross domestic product in 2027 is 'more than complicated' after the 2023 deficit soared to 5.5% of GDP, a top economic adviser to the government told Les Echos in an interview.

Camille Landais, deputy head of the Council of Economic Analysis advising the prime minister, also told the paper that the government's repeated pledge not to hike taxes was 'absurd' in light of France's financial situation.

Last week, Economy Minister Bruno Le Maire said the government still intended to cut the deficit to 3% of GDP in 2027, even though it was significantly wider than expected in 2023.

"Reducing the deficit to 3% by 2027, as things stand, is going to be more than complicated," Landais said in the interview published on Tuesday.

He added that there was a risk the government sets targets "without having thought through the measures needed to achieve them realistically".

France needed to achieve about 1% of GDP of additional public investment a year to protect the climate and between 0.5% and 1% of GDP annually for other investments, such as defence, he said.

"If we take all these factors into account, and if we want to stabilise the debt trajectory, we will need to reduce the primary deficit (...) probably by around 15 billion euros ($16.10 billion) on average each year, over a period of around ten years."

($1=0.9320 euros)