France to inject $49 bn in economic stimulus to soften Covid-19 blow

France's government presented its 2021 budget on Monday, a plan that aims to rescue the country's beleaguered economy from the impact of the coronavirus pandemic by injecting a 42 billion-euro (USD 49 billion) stimulus next year.

Finance Minister Bruno Le Maire said we are convinced that France can recover, and quickly recover, following a Cabinet meeting.

France's economy is expected to shrunk 10 per cent this year, in its worst recession since World War II. Earlier this month, French President Emmanuel Macron's centrist government unveiled a 100 billion-euro (USD 117 billion) recovery plan aimed at creating jobs and saving struggling businesses.

"By the end of 2021, we want to release 42 billion euros of these funds, so nearly half of it, in order to have quick economic results, Le Maire said.

The government hopes the economy will grow 8 per cent next year, boosted by the recovery plan.

The massive plan includes money to bring back the manufacturing of medical supplies to French factories, develop hydrogen energy, help museums and the cinema industry, train young people for 21st century jobs and hire more staff at unemployment offices.

Spending money to save jobs and businesses is a good investment, Le Maire argued.

France's public debt is expected to surge from less than 100 per cent of gross domestic product last year to 117.5 per cent this year, according to the government's forecasts.

Le Maire vowed that the debt will be repaid" through recovered growth, cuts in public spending and major reforms including changes to the country's pension system.