France’s Le Maire Sees Boost From ECB Rate Cuts in Coming Months
(Bloomberg) -- French Finance Minister Bruno Le Maire said declining interest rates will revive economic momentum in the coming months after a period of stagnation.
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Speaking to a conference of entrepreneurs in Paris, he said an expected loosening of monetary policy at the European Central Bank will bring significant change to the business environment.
“Interest rates should fall in the coming months and that means you can borrow more easily, invest more easily and citizens will buy more,” he said. “That will give us more economic momentum at the end of 2024 and really powerful economic momentum in 2025 and 2026.”
The finance minister’s comments come as ECB policymakers have signaled they’ll start cutting rates in June. Data earlier on Wednesday cemented those prospects, showing euro-area inflation slowed more than expected.
The governor of France’s central bank, Francois Villeroy de Galhau, warned last week that waiting too long to loosen policy would inflict undue economic damage on Europe. He has also said a cut as soon as the ECB’s April 11 meeting remains possible.
The slowdown in economic growth in France has already created fiscal problems for the government, forcing it to find extra spending cuts after disappointing tax receipts caused the budget deficit to widen. The Finance Ministry is counting on an improvement in the situation driving growth to 1% this year.
“Your economic situation and the economic situation of the country won’t stop getting better in the coming months and years,” Le Maire said.
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