France will miss its deficit targets as growth in the euro zone's second-biggest economy fails to live up to the government's hopes, the International Monetary Fund said on Thursday, reports Reuters.
In its annual report on the French economy, the IMF also saw a real threat that voter resistance to spending restraints could jeopardise France's long-term strategy for restoring the public accounts to health.
It estimated the public sector deficit will come to 4.0 percent of economic output this year, more than the 3.8 percent targeted by President Francois Hollande's Socialist government.
As a result, France will fail to bring its deficit in line with an EU-agreed limit of 3 percent next year, the IMF estimated, forecasting instead a budget gap of 3.4 percent.
France has already received two extra years to reach the limit and risks a credibility-damaging showdown with EU partners like Germany if it is forced to seek yet more time.
The government has based its plan to meet the deficit targets on expectations the economy will grow 1.0 percent this year and 1.7 percent next year, which the IMF estimated to be too optimistic.
Cutting its growth forecasts, the IMF predicted the economy would grow only 0.7 percent this year and 1.4 percent next year.
Finance Minister Michel Sapin said earlier on Thursday the government was standing by its forecast at least until second quarter growth figures are published in mid-August.
Read more of this report from Reuters.