FRANCE - France will fail to lower its deficit to less than 3% of GDP by 2013 unless it tackles pensions reform, according to the International Monetary Fund (IMF).
In its annual review of the French economy, the IMF called on the government to introduce new measures to cut its deficit.
"The fiscal deficit in 2010 was 7.1%, better than foreseen, and a sizeable upfront adjustment is being made in 2011 to restore sustainable public finances," it said.
"The overall budget deficit is to be reduced to 3% of GDP by 2013 and 2% of GDP by 2014.
"The ability to achieve the targeted adjustment also hinges on the pace of the economic recovery, and more efforts might be needed to achieve the 2012-13 targets if actual growth outcomes fall short of the authorities' projections."
Directors at the IMF also called on France to introduce "deeper reforms of the pension and health care systems, building on recent progress".
Earlier this month, the French minister of labour said he would publish a ministerial order to extend the length for contributions for people born in 1955 before year-end, after a new report revealed that life expectancy was increasing at a higher rate than previously estimated.
The announcement came a few days after the implementation of the new measures adopted under the 2010 reform that aimed to increase the legal retirement age for people born after 1951.
The government's effort comes at a time when it is trying to safeguard its AAA credit rating - last month, Standard & Poor's said it would probably cut France's rating in the long term if the government failed to push through additional reforms.
"The main policy priorities are to restore fiscal sustainability, safeguard financial sector stability and reduce unemployment," the IMF said.
"At the same time, it is important to build on the momentum of structural reforms to promote competitiveness and inclusive growth."
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