Pharmaceutical Spending To Be A Target Of Imminent Fiscal Austerity Measures

BMI View: Despite concerted progress made on the fiscal consolidation front in the first half of 2011, the French government's medium-term fiscal targets remain on the optimistic side, particularly given the deteriorating global macroeconomic backdrop and the potential need for state-led capital injections in the domestic banking sector. Given France's high public debt-to-GDP ratio, this raises the prospect that the country's sovereign creditworthiness could be called into serious doubt, which in turn would send borrowing costs significantly higher and necessitate more aggressive fiscal tightening by the state, including targeting the pharmaceuticals and healthcare sector, which is a recipient of a

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