Banque de France Governor Moulin Says France Can Cut Deficit to 3% of GDP by 2029

Banque de France Governor Emmanuel Moulin told CNBC on Thursday that France is capable of reducing its budget deficit to 3% of GDP within three years, projecting a return to that level by 2029. Speaking on the sidelines of the IMF Meetings in Bangkok, Moulin said France is "putting the house in order" and expressed confidence in both France's financial stability and that of Europe more broadly.

France's deficit stood at 5.1% of GDP last year, placing it under the EU's excessive deficit procedure, which calls on Paris to bring borrowing closer to the bloc's 3% threshold. Moulin said recent increases in French government bond yields are not a reflection of a deteriorating fiscal position, but rather stem from political uncertainty over whether parliament will adopt a budget targeting a 5% deficit, the government's stated objective for the near term.

France is navigating a difficult political environment, with budget negotiations complicated by student protests and pressure from bond markets. Moulin's comments at the IMF Meetings represent a direct effort to reassure investors that the country's fiscal consolidation path remains intact despite the turbulence.