France Aims for a 5% Deficit Target by 2025 Amid Moody's Warning

Following Moody's negative outlook revision on France's credit rating, French Finance Minister Antoine Armand emphasized the country's commitment to reducing its public deficit. The shift in outlook from "stable" to "negative" by Moody's highlights growing doubts about France's ability to narrow its budget deficits.

Speaking at the International Monetary Fund and World Bank annual meetings held in Washington, Armand stated that France had already anticipated the possibility of a negative outlook and had taken steps to manage its debt. The country's financial target, as outlined in a budget plan announced earlier this month, is to achieve a public deficit of 5% of GDP by 2025.

The finance minister underscored the significance of this target not only as a financial benchmark but also as a political goal that marks the beginning of public finance consolidation efforts in France. In addition to fiscal tightening, Armand stressed the need for growth to balance deficits and to finance necessary investments for the country's transition to clean energy.

When asked about the likelihood of high tariffs on European goods if the Republican candidate Donald Trump were to win the U.S. presidential election on November 5, Armand refrained from commenting. However, he expressed that France, along with the U.S. and other countries, must work together against non-market trade practices stemming from countries like China. Armand emphasized the importance of a coordinated response to prevent further disorder and economic imbalances.