2023-06-30 18:00:31
DISPATCH — In June, French inflation continued to decline, suggesting a lasting lull on the price front. At the same time, the public debt for its part exceeded the symbolic threshold of 3,000 billion euros for the first time.
Prices continue to rise slightly, but less rapidly, for the second month in a row. Inflation reached 4.5% over one year, after 5.1% in May and 5.9% in April, dropping for the first time in more than a year below the 5% mark.
In energy, prices have even fallen, marking a trend reversal since the start of the conflict in Ukraine.
“These are encouraging results,” commented Sylvain Bersinger, chief economist at Asterès, interviewed by AFP, estimating that inflation should continue to decline over the rest of the year.
“The fact that inflation is falling and that it will probably continue to fall is rather positive for household consumption”, one of the traditional engines of French growth which is currently idling, but which could regain some strength. at the end of the year or at the beginning of 2024, he added.
The Minister of the Economy, Bruno Le Maire, promised in early June that hundreds of food products would see their prices drop from July, under a commitment made to Bercy by these 75 major agrifood manufacturers. . Consumption increases again, but very slightly. Nothing to rejoice too quickly…
Not “catastrophic”
For Sylvain Bersinger, however, it is important to remain positive, particularly with regard to public debt. Even if it swelled in the first quarter, crossing 3,000 billion euros.
The country’s debt, which increased massively with the health crisis and then the energy shock, further increased by 63.4 billion euros, to reach 3,013.4 billion in absolute value at the end of March.
Relative to GDP, public debt rose to 112.5%, from 111.8% (revised upwards) at the end of December 2022, and 114.8% in the first quarter of 2022.
“Debts were issued this quarter when they could have been issued the quarter before or after,” qualified the economist. “You shouldn’t say to yourself, it’s great, consumption is picking up again or it’s catastrophic, the debt is increasing,” he summed up.
The level of debt is of course still very high. Well beyond the European budgetary objective of 60% of GDP which, after its suspension during the Covid, will be in place again in 2024.
And this increase in indebtedness falls all the more badly as the government has planned to cut at least ten billion euros in spending over the five-year term, particularly in health, in an attempt to restore public finances. Other savings will be added from the 2024 budget.
The executive presented in April a more ambitious trajectory for the restoration of the accounts of France, which plans to reduce the debt to 108.3% of GDP in 2027 and the deficit to 2.7%, in the nails of Europe.
After 2.5% in 2022, economic growth should slow to 0.6% this year, according to an INSEE forecast published in mid-June. Once again, this is less than the 1% increase anticipated by the government.
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