French government agencies will have to find more ways to cut spending, Finance Minister Bruno Le Maire said on Tuesday, after official data showed the 2023 public deficit overshot its target.

Statistics agency INSEE said the 2023 public accounts showed a fiscal shortfall of 5.5% of economic output last year, up from 4.8% in 2022 and significantly more than the government's target for 4.9%.

Finance Minister Bruno Le Maire said tax revenue, which tends to track inflation, was a weaker-than-expected 21 billion euros ($22.8 billion) because inflation fell faster than planned.

Meanwhile, spending on unemployment benefits and outlays by local governments was higher than expected, Le Maire added.

"I'm calling for a collective wake-up call to reduce public spending," Le Maire told journalists. "We have to firmly abandon all spending that does not yield the expected results."

He added that he would write to hundreds of French public agencies later on Tuesday to require them to find as many budget savings as their cashflow would allow. Local governments would also be called on to squeeze their budgets.

Though the government had warned in advance the deficit would be worse than expected, it is still bad news because it means further additional budget savings need to be found this year to meet a 2024 deficit target of 4.4%.

The government has already flagged 10 billion euros in extra budget cuts this year and said it might need to pass legislation mid-year to come up with additional savings.

Le Maire said he remained committed to reducing the deficit to below an EU limit of 3% by 2027 and ruled out increasing taxes.

Rating agencies are due to update their ratings on French debt in April and May, weeks ahead of EU parliamentary elections which polls show the far right comfortably leading.

INSEE also said France's public debt stood at 110.6% of GDP at the end of the fourth quarter of 2023, versus 111.9% at the end of the fourth quarter of 2022.

($1 = 0.9219 euros)

(Reporting by Leigh Thomas; Editing by Sudip Kar-Gupta, Philippa Fletcher and Sharon Singleton)