France Faces Budget Deficit Crisis Amid Weak Tax Revenue

France's finance ministry has revealed a potential budget deficit of 5.6% this year due to weak tax revenues and additional expenses. The situation poses a challenge for President Macron, who is trying to form a new government after snap elections. The deficit could rise to 6.2% by 2025.

PARIS, Sept 3 (Reuters) - France's budget deficit is set to be significantly higher than anticipated this year if additional savings are not identified, the finance ministry announced in a letter to lawmakers.

The deteriorating financial situation is adding to the pressures on President Emmanuel Macron, who is currently facing difficulties in naming a new government post snap elections that resulted in a hung parliament.

The finance ministry's update to lawmakers indicated that the public sector deficit could reach 5.6% of economic output this year, compared to the 5.1% target, and may increase to 6.2% by 2025. Weaker-than-expected tax revenues and rising expenses, such as the security crisis in New Caledonia and parliamentary snap elections, have contributed to the situation.