IMF hails French re­forms un­der Macron

Kuwait Times - - BUSINESS -

The IMF yes­ter­day hailed French Pres­i­dent Em­manuel Macron’s “am­bi­tious” re­form pro­gram, say­ing his spend­ing, la­bor and tax over­hauls could go “a long way” to­wards tack­ling high un­em­ploy­ment and weak growth.

The In­ter­na­tional Mon­e­tary Fund raised its 2017 growth fore­cast for France by 0.1 points to 1.5 per­cent and said it could “fur­ther ac­cel­er­ate” next year. “The new govern­ment is push­ing ahead with an am­bi­tious eco­nomic pro­gram to make France’s econ­omy more dy­namic and its pub­lic fi­nances sus­tain­able,” the IMF said af­ter its an­nual anal­y­sis of the French econ­omy.

“The en­vis­aged la­bor and tax re­forms are aimed at boost­ing growth, em­ploy­ment and com­pet­i­tive­ness,” it added. It also said the cen­trist govern­ment formed by Macron, a 39-year-old for­mer banker, “has rightly em­pha­sized” the need to de­crease pub­lic spend­ing.

A less prof­li­gate ap­proach will “help grad­u­ally re­duce the bud­get deficit and debt,” the Wash­ing­ton-based IMF said. Macron’s govern­ment has pledged to meet the EU deficit limit of 3.0 per­cent of GDP in 2017, a tar­get France has missed for the past decade.

It has iden­ti­fied 4.5 bil­lion euros ($5.1 bil­lion) in sav­ings across govern­ment de­part­ments this year. Lo­cal govern­ments will also have to tighten their belts, Bud­get Min­is­ter

Ger­ald Dar­manin said yes­ter­day, an­nounc­ing 13 bil­lion euros in fund­ing cuts for towns, de­part­ments and re­gions by 2022. For­mer econ­omy min­is­ter Macron took over from So­cial­ist pres­i­dent Fran­cois Hol­lande in May af­ter beat­ing farright leader Marine Le Pen in the pres­i­den­tial elec­tion.

Macron has vowed to make France more at­trac­tive to in­vestors by slash­ing cor­po­rate and pay­roll taxes and lib­er­al­iz­ing the la­bor mar­ket. He also wants to cut 120,000 civil ser­vice jobs by the end of his five-year term to help fund a 50-bil­lion-euro in­vest­ment pro­gram.

In June, his fledg­ling Republique En Marche (Repub­lic on the Move) party, which claims to be nei­ther of the left nor the right, won a re­sound­ing ma­jor­ity in elec­tions to the Na­tional Assem­bly.

The IMF said Macron’s “strong po­lit­i­cal man­date” and the im­prov­ing eco­nomic con­di­tions give him a “unique win­dow of op­por­tu­nity” to im­ple­ment his agenda. — AFP

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