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00:00Now the French government has slashed its economic growth forecasts underscoring the constraints on President Emmanuel Macron as he tries to repair public finances and the Covid pandemic pandemic and support households with rising struggling rather with rising prices. Joining us now is Bloomberg's Caroline Connan so killing him. I'm also looking at Morgan Stanley. They've just have a piece out predicting euro area recession in the fourth quarter. Issues for France of course compounded with all of that in Europe. How significant is the growth forecast cut in the region. It is a very significant to the French growth forecast from 4 percent to 2.5 percent. And this comes just one week after the bond of course already cut their growth forecast for France and also of course. Ten days after Macron lost his outright majority at the National Assembly. So of course this is reducing the margins of manoeuvre for the French government because this is going to weigh on public finances of French debt is expected to remain very high. A forecast at one hundred and twelve percent of GDP for this year. Surprisingly however in this new forecast the deficit is still expected at 5 percent because France has had about 50 billion euros of unexpected tax receipts. That's what they said last night. However this is going to make it more difficult for Merkel to have more more money in order to invest in healthcare in education. So that is not really going to help the anger that we saw during the legislative elections with the French very angry at the way Merkel has been handling the pandemic and the recovery post pandemic. And of course now the war in Ukraine and inflation in energy prices weighing on consumer spending. So the far left the new run John Camillo shown for example is calling for a cut in fuel taxes. This is something that you know no man. The finance minister has already ruled out because he said that's going to cost more than 20 billion euros. France cannot afford it because the public finances are already in an allowed level.

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France Cuts 2022 Growth Target on Surging Inflation

The French government slashed its economic growth forecast on Tuesday as surging energy and food costs related to Russia’s invasion of Ukraine damp consumer spending. Caroline Connan reports on Bloomberg Television. (Source: Bloomberg)

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