Towards a public deficit of around 6% of GDP in 2024, according to a new estimate

Towards a public deficit of around 6% of GDP in 2024, according to a new estimate

2024-09-20 17:53:00

« Around 6% » of the GDP. This is the new anticipation of the skid of the French public deficit by the Ministry of Economy and Finance if the policy does not change. An estimate even more important than this summer, indicated this Friday the newspaper The EchoesIndeed, in a note dated July, the Treasury warned of a risk of the deficit slipping to 5.6% of GDP in 2024 with unchanged policy, against the target of 5.1% set by the outgoing government.

Public deficit: Bruno Le Maire’s warning to Michel Barnier

Dexcessive deficit

In 2023, the public deficit was already off the mark, at 5.5% of GDP against 4.9% anticipated. At the beginning of the year, the State attributed this slippage to tax revenues of 21 billion euros lower than expected last year. This earned France, along with six other European countries, to be singled out by Brussels for excessive deficit.

These countries, which also include Italy and Belgium, last year exceeded the limit set at 3% of gross domestic product (GDP) by the Stability Pact, which also limits debt to 60% of GDP. They will have to take corrective measures to comply with the budgetary rules of the European Union in the future, under penalty of sanctions of 0.1% of GDP per year, or nearly 2.5 billion euros in the case of France. Even if in reality, these politically explosive punishments have never been applied.

Budget 2025: what the ceiling letters reveal

The Court of Auditors has warned of an unattainable objective

For his part, the first president of the Court of Auditors, Pierre Moscovici, had already estimated on Wednesday that the objective of a deficit of 5.1% of GDP would not be ” not reached » this year. Questioned in the Finance Committee of the National Assembly on the risk that this deficit would reach 5.6%, he replied that ” Given the poor news on tax revenues and spending, this figure is perhaps the least bad that can be hoped for. ».

« We are (…) facing a public finance situation that I consider to be truly worrying. I also think that the budget for 2025 will probably be the most delicate or one of the most delicate of the Fifth Republic. ” he continued.

He therefore pleaded for the next government to present ” a credible trajectory ” in this sense, qualifying as already ” obsolete ” that displayed by the resigning government in the winter of 2023 then in the spring of 2024. ” It is imperative to tell the truth to the French through the finance bill ” for 2025 which is supposed to be presented to Parliament at the beginning of October,” then the national medium-term budget plan that the government must transmit to the (European) Commission a few days later ” he stressed.

Budget 2025: winners and losers of the ceiling letters

A delayed budget calendar

In the draft budget for 2025, the government will therefore have to detail how it intends to redress France’s public finances, which finds itself in a budgetary situation ” very serious » according to Prime Minister Michel Barnier.

Especially since the budget calendar has been significantly delayed this year by the dissolution and the long search for a Prime Minister and a government. France’s 2025 budget project could thus be examined in the National Assembly from October 9. All the while knowing that the head of government must present his roadmap in a general policy statement to the Assembly at the beginning of October.

Parliament must then have 70 days to decide and the Constitutional Council five days to study the probable appeals, before publication by December 31. Before the parliamentary stage, the draft budget must be presented to the Council of Ministers and, beforehand, must imperatively pass under the scrutiny of the High Council of Public Finances and the Council of State.