The High Council of Public Finances (HCFP) on Wednesday blasted the government’s 2022 budget proposal, saying it was unable to give a “fully enlightened” opinion, because “far-reaching measures” planned by the government were not integrated into the document sent to the independent body. “The High Council regrets these referral conditions”, he indicates in his opinion, adding that he “is not at this stage in a position to comment on the plausibility of the deficit forecast for 2022 (-4 , 8 points of GDP) ”.
This is the first time since 2016, and the last budget of François Hollande’s five-year term, that the HCFP is so severe with a budget bill. “For 2022, the advice was seized on the basis of incomplete information. Due to a lack of information, the board cannot at this stage decide on the public balance for 2022 ”, underlined the president of the HCFP and first president of the Court of Auditors, Pierre Moscovici, in hearing at the National Assembly this Wednesday morning.
Big expenses are missing
The draft text that the government must adopt in the Council of Ministers on Wednesday does not include the investment plan and the engagement income for young people, on which the executive is still working, and which should represent several billion dollars. euros of additional expenses. “If, as is likely, the macroeconomic and public finance scenario were modified to take these measures into account, a new referral to the High Council by the government would then be necessary,” warns the HCFP.
On the revenue front, the independent body responsible for assessing the credibility of the government’s budget forecasts considers the government’s growth forecast of 6% for 2021 to be “cautious”, which suggests more revenue if the economy does better. . He also considers the forecast of 4% growth for 2022 “plausible”. However, employment forecasts for 2021 and 2022 are considered “too low” in view of the improvement in the economic situation, according to the High Council.
Allocate surplus revenue to deleveraging
“In 2022, the forecast of income and that of expenditure are very likely to be underestimated”, summarizes the HCFP. At this stage, the government is forecasting a decrease in overall state spending of 34.5 billion euros (-7.9%) due to the decrease in emergency support and recovery spending. But the so-called “controllable” expenditure, which corresponds to the actions of the ministries, will increase by nearly 12 billion euros.
“The debt has increased by 17 points since 2019, it is an unprecedented situation of public finances since 1945”, alerted Pierre Moscovici to the Assembly on Wednesday. Given the public debt, forecast at around 114% of the GDP in 2022, Pierre Moscovici considered that it was “essential that the possible surplus of receipts not be immediately recycled in new expenditure but that it be allocated to the deleveraging, which is a priority ”.