President Emmanuel Macron and Minister of Finance Bruno Le Maire at the Elysée, March 10, 2023 in Paris (POOL / Kin Cheung)
The public deficit will still reach at least 5% of GDP in 2024, against 4.4% hoped for, in the new forecasts to be revealed by the government on Wednesday, several daily newspapers said on Tuesday.
In this new annual stability program, which maps out the trajectory of French public finances for Brussels, the public deficit (balance of deficits and surpluses of the State, Social Security and local authorities) will be recorded at 5% or even 5.1% of GDP for this year, according to Les Echos and l’Opinion.
France’s public debt and deficit as a % of GDP since 1990 (AFP / Bertille LAGORCE)
It has already seriously slipped to 5.5% instead of the 4.9% forecast in 2023, mainly due to lower revenues than expected.
Last week, on The Parliamentary Channel, the general budget rapporteur at the National Assembly Jean-René Cazeneuve had already judged it “very likely that the objective of 4.4% in 2024 is no longer the planned objective at all” in the new stability program.
In February, to urgently restore the situation, the Minister of the Economy Bruno Le Maire announced ten billion euros in savings on the state budget this year: this is the maximum that could be cut by decree, without having to go through a amending finance law in Parliament.
According to Les Echos, information confirmed to AFP, the Minister of the Economy sent several parliamentarians this weekend a message supporting the idea of such an amending finance law.
According to the economic daily, he mentioned a presentation to the Council of Ministers on May 22, then an examination in the Assembly after the European elections on June 9.
The Ministry of Finance at the Pont de Bercy in Paris, June 5, 2023 (AFP / -)
But this initiative, assures Les Echos, has greatly displeased the President of the Republic Emmanuel Macron and Prime Minister Gabriel Attal, who are not on this line.
Without being able to take more drastic saving measures than the 10 billion, it is logical that the deficit will be reduced very little this year, where growth is only expected at 1%.
Under these conditions, for the public deficit to fall in three years the enormous step allowing it to come down to the target required by the EU of 3% of GDP in 2027, the government would only have to count on very good growth in 2025 and 2026.
In Bercy’s latest stability program, growth is forecast at 1.7% for each of the two years, and at 1.8% in 2027.
Last week, Bruno Le Maire predicted in front of entrepreneurs “a real powerful economic boost in 2025 and 2026”, suggesting an upward revision of these growth prospects in the stability program.