The general public deficit was 5.8% of GDP in 2024 as an alternative of the anticipated 6%, but the Minister of the Economic system stated it was “not excellent news”.
The French public deficit got here in at €169.6 billion in 2024, 5.8% of GDP, as revenues accelerated and spending didn’t develop as a lot as within the earlier 12 months. That’s in keeping with the French statistics workplace INSEE’s first account of the general public funds for final 12 months, topic to revision in Might.
Minister of the Economic system Eric Lombard attributed the outcome to “very tight spending by Michel Barnier’s authorities” on the finish of the 12 months, in addition to “barely” better-than-expected revenues in current weeks, in an interview with France Inter radio.
Nonetheless, Lombard stated that the determine was “not excellent news,” including: “so long as we’ve not addressed the deficit and debt drawback, we’re in danger.”
The French deficit is nearly double the three% goal eurozone members are alleged to respect. The federal government plans to cut back the deficit to five.4% of the GDP in 2025, earlier than returning under the European restrict of three% in 2029.
The nation can also be battling one of many highest debt ratios within the bloc. The French public debt rose to 113% of GDP in 2024, from 109.8% within the earlier 12 months.
Why the smaller deficit?
Revenues accelerated by 3.1% in 2024, after the earlier 12 months’s 2.2%, and got here in at €1,500.6bn. Revenue from taxes elevated barely by 2% (+€16.1bn) after a 0.6% soar in 2023.
Spending rose by 3.9%, after a raise of three.7% in 2023, primarily pushed by the rising price of pensions listed to inflation, together with an increase in unemployment bills.
Making ready the subsequent finances: A ‘nightmare’?
The present administration is dealing with the big activity of decreasing spending amid weak financial development prospects. Including to this strain is President Emmanuel Macron’s ambition to spice up defence spending.
The Minister for Economic system stated on Thursday that the federal government is bringing a couple of public finance alert committee, involving native authorities, the social sector and ministers accountable for budgets. They are going to launch the committee in mid-April throughout a significant convention on public funds ready by Prime Minister François Bayrou.
In keeping with the French central financial institution’s revised development forecast, Europe’s second greatest economic system is about to develop by 0.7%, down from 0.9% beforehand— in 2025. Lombard famous that there’s certainly “vital uncertainty”, significantly round how the US tariffs are going to influence the French economic system.
Earlier this week, authorities spokesperson Sophie Primas stated that getting ready the 2026 finances was shaping as much as be “a nightmare given the numerous monetary difficulties”.