PARIS, June 26 (Reuters) - The French government's 2025 budget deficit target is still in reach, but cost overruns mean that an extra 5 billion euros ($5.9 billion) in spending cuts is needed to get there, the Finance Ministry said on Thursday.
Centrist Prime Minister Francois Bayrou's minority government is struggling to get the public finances back under control after spending spiralled higher and tax income fell short of expectations.
The government - the second administration formed since an election that produced a hung parliament last summer - aims to cut the public sector budget deficit to 5.4% of GDP from 5.8% last year as a first step towards getting back in line with an EU target of no more than 3% by 2029.
"The diagnosis is clear, and so are the decisions: meeting the public deficit target of 5.4% of GDP in 2025 remains achievable, but subject to an additional effort of 5 billion euros on spending," the ministry said in a statement.
In a mid-year update on the public finances, the ministry said that while tax income was so far in line with expectations, spending by some ministries, the health system and municipalities was running slightly over budget.
The new cuts come on top of 5 billion euros already frozen earlier this year, a ministry source said.
With opposition parties prowling for an opportunity to topple him with a no-confidence vote, Bayrou is preparing to outline in the coming weeks 40 billion euros in new spending cuts in next year's budget.
($1 = 0.8520 euros)
Reporting by Leigh Thomas; Editing by Sudip Kar-Gupta, William Maclean and Hugh Lawson
Source: Reuters