France should keep the public purse strings loose next year to support the economy before reining in spending gradually from 2023, the International Monetary Fund (IMF) said on Tuesday. In a statement concluding an annual staff visit to France, the IMF raised its growth forecast for the euro zone’s second-biggest economy this year to 6.75% from an estimate in October of 6.3%. However, it trimmed France’s outlook for 2022 to 3.7% from a previous forecast of 3.9% as growth moderates after an exceptional rebound from the pandemic this year. With the economy still in recovery mode and health risks still a threat, the IMF said there was no rush to rein in the public finances next year and that the government should focus on growth-boosting investments. However, from 2023, the gap between France’s debt burden and its European peers would widen unless the government changed course to rein in spending. With the government expecting a public sector budget deficit of 8.1% of gross domestic product this year, the IMF said France needed to lay down plans for a “cumulative fiscal effort” of 4.75 percentage points of GDP over seven years. Last month, the government raised its deficit estimate for 2022 to 5.0% of GDP from 4.8% previously to take account of 6.2 billion euros ($7.2 billion) of extra spending on measures to soften the impact of higher energy prices next year The IMF said it supported measures, such as handouts to poor households to cover energy bills, but it warned against broad-based transfers and price-control measures that are less well targetted and more costly.