The head of the International Monetary Fund (IMF) is urging France to speed up structural reforms to bolster economic growth and warning against using weak inflation as an excuse to relax public deficit reduction efforts.
In an interview with French daily Les Echos to be published on Monday, IMF Managing Director Christine Lagarde said the French government must implement “truly, rapidly and fully structural reforms likely to generate growth”.
“Even if inflation is weaker than expected, it cannot be used as a screen to postpone the necessary efforts on (public) spending”, she added.
Socialist President Francois Hollande’s government was forced to abandon growth and fiscal targets for 2014 and 2015 last month after data showed the economy delivered no growth for the second straight quarter.
Lagarde, who was France’s minister of finance from 2007 to 2011, also said she did not believe the euro zone’s austerity policy had been excessive and found the pace of deficit reduction “appropriate in each country” of the bloc.