Le Maire Says France Sticks to Its Growth Outlook as Risks Rise

(Bloomberg) -- French Finance Minister Bruno Le Maire said the government is sticking to its growth forecast of 1.7 percent in 2019, even as he warned of risks from the international environment and the Yellow Vests protests in France.

The threat of a trade war between the U.S. and China is weighing heavily on global growth, and there are uncertainties in Europe, notably surrounding Brexit, Le Maire said in an interview on Europe1 radio Sunday. In France, the minister said the so-called Yellow Vests protests have a high economic cost and took about 0.1 percentage point off growth in the fourth quarter last year.

“We are still counting on growth of 1.7 percent in 2019, but I’m obliged to recognize that all our international environment is tense,” Le Maire said.

French President Emmanuel Macron announced a series of tax cuts in December in an attempt to appease the protesters, and has promised a national debate in the coming weeks on fiscal policies and on changing how the state functions.

But Le Maire said the government won’t go back on its landmark tax decisions, in particular the abolition of a wealth tax that many Yellow Vests protesters say should be reinstated. The government should focus on continuing with Macron’s election promises to reform the country’s economy, according to Le Maire.

“We need to accelerate the transformation of the French economy to allow us to get better results,” he said.

To contact the reporter on this story: William Horobin in Paris at whorobin@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Peter Laca, Kevin Costelloe

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