The French government will cut the industrial production tax at a slower pace than originally planned as it seeks to meet deficit reduction targets despite lower economic growth, said Finance Ministry chief Bruno Le Maire.

The tax, known as the CVAE, will be reduced in two phases of 4 billion euros each in 2023 and 2024, Le Maire said

The threat of recession in Europe amid rising inflation and risks to energy supplies is forcing governments to balance support for their economies with the need to rebuild public finances after the Covid pandemic.

In France, President Emmanuel Macron aims to return the budget deficit below 3% of output by the end of his second term in 2027. Le Maire said the government should not deviate from that plan as early as next year, despite the economic difficulties.