France Faces Fiscal Challenge: 40 Billion Euros in Savings Needed

France aims to reduce its budget deficit from 5.4% of GDP this year to 4.6% by 2026, requiring 40 billion euros in savings, according to Finance Minister Eric Lombard. The plan aligns with EU rules and seeks a 3% deficit by 2029 amid global economic uncertainty.

France is embarking on a significant fiscal journey, aiming to decrease its budget deficit to 4.6% of GDP by 2026 from 5.4% this year. Finance Minister Eric Lombard detailed the ambitious plan on Sunday, highlighting the need for 40 billion euros in savings.

"We are in a state of emergency, regarding our budget," Lombard emphasized. France, as the euro zone's second-largest economy, seeks to reduce its deficit in compliance with European Union regulations.

The initial goal is to cut the deficit to 5.4% from last year's 5.8%, ultimately targeting an EU ceiling of 3% by 2029. France also revised its 2025 economic growth forecast down to 0.7% amid global trade tensions.

(With inputs from agencies.)