The International Monetary Fund (IMF) warned on Wednesday of the risk of a large budget slippage in France without consolidation efforts, as the National Assembly is considering the budget law for 2025 which provides for “60 billion euros ” of budgetary effort.
After falling to 6% of GDP in 2024, the government deficit could fall slightly to 5.9% next year, before increasing to 5.8% in 2026 and stagnating at 5.9% in 2027, 2028 and 2029 , according to a budget report from the Washington administration. institution published Wednesday.
Without further efforts, public debt could even rise a little further over the years and peak at 124.1% of GDP in 2029, estimates the IMF, which sees it at 112.3% at the end of this year .
France has seen its public deficit far exceed forecasts for 2024, initially forecast at 4.4% of GDP but eventually expected to peak above 6%.
However, the estimates on the deficit and debt do not take into account the 60 billion euros that the government wants to release in the 2025 budget project under discussion in the National Assembly from Monday. The text plans to save on spending and increase taxes.
Overly optimistic government forecasts
“It is normal and desirable that there is a consolidation of public finances in France,” Pierre-Olivier Gourinchas, the IMF’s chief economist, told AFP on Tuesday, “to demonstrate that, decisively, the trajectory of public finances will return to a sustainable path.
Beyond 2025, a government “medium-term structural and fiscal plan” for 2025-2029, consulted by AFP, aims to reduce the general government deficit to 2.8% of GDP in 2029, below the threshold maximum of 3% envisaged by European budget rules.
But several experts consider the government’s forecasts too optimistic, such as the Fitch rating agency which in early October said it expects a GDP deficit of 5.4% in 2025 while the government is counting on 5%.
According to Wednesday’s IMF report, specifically citing the case of France, “in advanced economies where the fiscal pressure is already high, adjustments should rely more on a reprioritisation of spending (for example, through a general spending review) as part of an overall reduction in public spending.
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