France Faces Wider Budget Deficit, Macron Government Scrambles for Solutions

French Budget Deficit Soars Above Target, Sparking Austerity Debate (2024) Paul Roberts Visitors: 67 ★★★★

The French government's hopes for a balanced budget in 2024 have vanished. As predicted, new forecasts reveal a state budget deficit reaching 5%, exceeding the anticipated 4.4% of GDP. The upcoming annual stability program submitted to Brussels may even show an even steeper deficit of 5.1%. This represents a significant deviation from previous projections, particularly for 2023, where the expected deficit was 4.9% but ended up at 5.5%. Lower-than-expected revenue is primarily responsible for this discrepancy.

Skepticism regarding the 4.4% target for 2024 was already voiced last week by Jean-René Cazeneuve, rapporteur for the French National Assembly's general budget. Economy Minister Bruno Le Maire responded by proposing immediate corrective measures, aiming to save €10 billion within this year's state budget – the maximum achievable without parliamentary approval.

However, Minister Le Maire's suggestion to consider stricter financial regulations through a new law has reportedly met with resistance. President Emmanuel Macron and Prime Minister Gabriel Attal allegedly hold differing opinions on the matter.

Due to the lack of more substantial austerity measures beyond the proposed €10 billion, the deficit is likely to see minimal improvement this year, especially considering the projected sluggish economic growth of only 1%.

To meet the EU's significant deficit reduction target of 3% of GDP by 2027, the government needs robust economic growth in the coming years. Bercy, the French Ministry of Economy and Finance, forecasts growth of 1.7% in both 2025 and 2026, with a slight increase to 1.8% in 2027.

Bruno Le Maire recently expressed optimism about the economic outlook for 2025 and 2026, hinting at the possibility of upwardly revising growth projections in the upcoming stability program during a meeting with entrepreneurs.

Paul Roberts
Paul Roberts

Paul Roberts 51 years old Born in Edinburgh. Married. Studied at University of Oxford, Department of Public Policy and Social Work. Graduated in 1997. Works at Standard Life Aberdeen plc.

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