2023-04-20 10:27:19
“France’s European credibility is at stake,” warned the French Minister of Economy and Finance, Bruno Le Maire, this Thursday during a press conference. The French government has indicated that it wants to accelerate the country’s debt reduction and the reduction of the public deficit by 2027, thanks to lower public spending and more dynamic economic growth.
“We want to accelerate France’s debt reduction,” said Bruno Le Maire, presenting the new public finance roadmap for the next few years.
The public deficit should fall firmly below the 3% mark of gross domestic product (GDP) set by the European Union’s budgetary rules: 2.7% in 2027 against a forecast of 2.9% so far. After reaching 4.7% in 2022, it should rise slightly this year (4.9%) before starting to gradually decline from 2024.
Deleveraging will also be accelerated, with debt representing 108.3% of GDP (compared to 111.6% at the end of 2022), a ratio several points lower than previously envisaged.
A “cooling” of public spending
As for inflation, which is attacking households in their wallets and which the European Central Bank is trying to counter with interest rate hikes, it should begin to slow from mid-2023, despite a forecast raised to 4.9% ( compared to 4.2% previously) for this year. It had reached 5.2% in 2022.
These prospects are contained in the stability program (PSTAB) which will be presented to the Council of Ministers next week and which is sent each year by the EU Member States to the European Commission, usually in the spring.
No more exceptional aid checks and other all-out support expenditure, amounting to hundreds of billions since the Covid: as a pledge of budgetary seriousness, the government is highlighting its desire to initiate a “cooling” of expenditure public sector, which should increase more slowly than inflation.
“We have just asked our compatriots to make an effort with the pension reform”, which raised the retirement age from 62 to 64, underlined Bruno Le Maire. “It is right that public actors (…) are also involved,” he added. At the same time, the government expects gradually more dynamic economic activity. After GDP growth slowed to 1% this year, he expects it to rebound to 1.6% in 2024 and then 1.8% in 2027.
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