France’s finances are not improving. The State budget deficit “would stand at 173.3 billion euros for 2023”, or 2 billion additional compared to what was planned in the end-of-management finance law, according to an announcement on Wednesday by the minister. of the Economy Bruno Le Maire in the Council of Ministers.
Presented on October 31, the end-of-management finance law for 2023 (LFG), a new category of finance law, anticipated a deficit of 171.4 billion euros.
VAT revenue revised downwards
Tax revenues were ultimately worse than expected: “net revenues from the general budget are 7.8 billion euros lower than forecasts” by the LFG, specifies the report of the Council of Ministers. The net corporate tax yield “is 4.4 billion euros lower than forecast, due to a lower than expected December advance payment and a sluggish tax profit”.
Furthermore, VAT “is 1.4 billion euros lower than forecast, and income tax presents a loss of 1.4 billion euros compared to forecast, due to lower rates of withholding tax from the summer 2023 declarations lower than expected”, according to the government.
“Deficit control efforts” will continue
Expenditures “are 6.2 billion euros lower than the level planned in LFG” partly thanks to “the under-execution of credits from ministries (-3.8 billion euros) and the lower mobilization of the levy on revenue (-1.3 billion euros) for the benefit of local authorities due to less recourse to the safety net in the face of energy prices,” according to the government.
“Efforts to control the state budget deficit will be continued during 2024,” affirms the executive. The final budgetary balance will, however, only be communicated at the time of submission of the bill relating to the results of management and approving the accounts.