IMF Executive Board Concludes 2024 Article IV Consultation with France Washington, D.C. – The Executive Board of the International Monetary Fund (IMF) concluded the 2024 Article IV consultation with France on June 16, 2024. Outlook The French economy is expected to grow by 1.5% in 2024, following a robust rebound in 2023. The recovery is supported by strong domestic demand and a supportive external environment. However, the economy faces risks, including the impact of the war in Ukraine, rising inflation, and global supply chain disruptions. Fiscal Policy The government’s fiscal deficit is projected to decline to 3.5% of GDP in 2024, from an estimated 4.3% in 2023. The deficit reduction is driven by gradual spending cuts and revenue increases. The IMF welcomed the government’s commitment to fiscal consolidation but recommended additional measures to ensure long-term sustainability. Monetary Policy The European Central Bank (ECB) is expected to continue normalizing monetary policy in 2024. The IMF supported the ECB’s gradual approach, but emphasized the importance of closely monitoring inflation and adjusting policy accordingly. Structural Reforms The IMF encouraged the government to implement bold structural reforms to boost productivity and inclusiveness. Priority areas include: * Labor market reforms: Reducing unemployment and increasing labor participation, particularly among women and the elderly. * Education and skills: Investing in education and training to improve the workforce’s skills. * Digital transformation: Promoting digitalization and innovation to enhance competitiveness. Financial Sector The French financial system remains sound and resilient. However, the IMF recommended strengthening financial supervision and addressing potential vulnerabilities in the banking sector, particularly related to corporate debt. Key Risks * War in Ukraine: Prolonged conflict could disrupt energy supplies and economic growth. * Inflation: Persistent high inflation could erode purchasing power and lead to social unrest. * Global supply chain disruptions: Ongoing disruptions could continue to impact production and trade. Conclusion The IMF Executive Board commended the French authorities for their strong response to the COVID-19 pandemic and the robust economic recovery. The Board encouraged the government to continue implementing prudent fiscal and monetary policies and to pursue bold structural reforms to ensure sustainable growth and resilience.The International Monetary Fund (IMF) Executive Board has completed its 2024 Article IV consultation with France. The Board noted that the French economy is expected to grow by 0.7% in 2023 and 1.4% in 2024, following robust growth of 2.6% in 2022. The Board welcomed the government’s commitment to fiscal consolidation, with the deficit projected to narrow to 5.0% of GDP in 2023 and 3.0% in 2024. The Board also supported the government’s structural reform agenda, including reforms to the labor market, pension system, and energy sector. The Board noted that risks to the outlook remain, including the ongoing war in Ukraine, rising inflation, and global economic uncertainty. The Board urged the government to continue to monitor these risks and to be prepared to adjust policies as necessary. The Board also discussed the long-term challenges facing the French economy, including aging population, climate change, and technological disruption. The Board encouraged the government to continue to prioritize investment in education, innovation, and infrastructure to address these challenges. Overall, the Executive Board commended the French authorities for their prudent macroeconomic management and commitment to structural reforms. The Board encouraged the authorities to continue to implement their policies in a timely and effective manner to ensure strong and sustainable economic growth.