France will find out this Tuesday how bad its economic figures are. INSEE will in fact reveal the extent of the slippage in the public deficit in 2023, the estimates of which revealed last week fueled the debate on the government’s budgetary management, which calls for people to “keep their cool”.
The French public deficit “will be above 5%” of GDP in 2023, Bruno Le Maire reaffirmed Monday on RMC. The Minister of the Economy had previously warned that this figure would be “significantly” higher than the 4.9% initially planned.
“Disastrous budgetary management”
According to press revelations, it would reach 5.6% of GDP, a figure corroborated during a visit Thursday to Bercy by the general rapporteur of the Senate Finance Committee Jean-François Husson, who castigated the “disastrous budgetary management” of the government, “unable to follow the budgetary trajectory that it itself had adopted”.
The INSEE figure is particularly awaited because every decimal place counts for public finances. “To put it simply, each 0.1 point” of GDP of additional deficit in 2023 “represents around 3 billion” euros missing from state coffers, explains economist Mathieu Plane. A deficit of 5.6% of GDP instead of 4.9% would therefore be increased by some 20 billion euros, calling into question its reduction trajectory.
Ranked third among the most indebted countries in the euro zone, France has promised its European partners to return the deficit to below 3% of GDP in 2027. This is equivalent to a minimum of 50 billion savings, according to the Court of Auditors. But the delay accumulated in 2023 risks having an impact in 2024 and the following years. In the Bercy technical notes consulted by the Senate, the government envisaged that, without corrective measures, the public deficit would rise to 5.7% in 2024 (compared to a drop to 4.4% currently planned) and to 5.9% in 2025 (compared to 3.7%).
It’s “not a drama”, judges Le Maire
“Let’s keep our cool!” », insisted Bruno Le Maire on Monday, for whom a deficit higher than expected is “not a tragedy”, even if “it is serious”. “We spent to protect”, he defended himself, in reference to “whatever it costs” during Covid-19 and to shields against inflation: “we spent what was necessary”.
Currently, the government’s objective remains a deficit below 3% of GDP in 2027, to “restore the public accounts in the long term”, further indicated the minister, who aims to do so “with firmness, but without brutality.