IMF Warns of France’s Rising Debt and Weak Growth, Urges Urgent Structural Reforms
The International Monetary Fund (IMF) has expressed concern over France’s economic trajectory in its latest report, citing weak growth, a persistent deficit, and rising debt.
The financial institution stressed the urgent need for structural reforms to restore public finances, warning that the country faces the risk of a major fiscal crisis by 2030.
An IMF mission, led by Manuela Goretti and comprising Florian Misch, Rasmane Ouedraogo, Maryam Vaziri, and Torsten Wezel, conducted consultations in France from May 12 to 22 as part of the 2025 Article IV assessment.
The IMF experts highlighted that consumption and investment remain sluggish, hampered by low confidence among households and businesses — a situation made worse by political fragmentation and social tensions, particularly surrounding pension reforms.
The IMF reported a public deficit of 5.8% of GDP in 2024, far from the government’s target of 3% by 2029. Without “significant measures,” the deficit could remain near 6%, with public debt continuing to rise through 2030.
The IMF cautioned against relying heavily on taxation to reduce the public deficit, noting that France already has one of the highest tax burdens in Europe. Instead, it recommended rationalizing public spending — a strategy that will require tough and decisive decisions.
These fiscal efforts, the IMF added, should build upon the measures already taken by Paris. Otherwise, the deficit will hover around 6% of GDP, and debt will keep increasing, despite the government’s pledge to meet European Commission requirements.
To meet its targets, the French government plans to save €40 billion by 2026 and is expected to present its proposals by July 14. These will likely combine spending cuts with increased revenues, including the removal of certain tax exemptions — but without broad-based tax hikes.
