The general public deficit was 5.8% of GDP in 2024 as an alternative of the expected 6%, yet the Minister of the Economy said it was “not excellent news”.
ADVERTISEMENTThe French public deficit got here in at €169.6 billion in 2024, 5.8% of GDP, as revenues accelerated and spending didn’t grow as much as within the previous 12 months. That’s in accordance with the French statistics office INSEE’s first account of the general public funds for last 12 months, subject to revision in May.
Minister of the Economy Eric Lombard attributed the result to “very tight spending by Michel Barnier’s government” at the tip of the 12 months, in addition to “barely” better-than-expected revenues in recent weeks, in an interview with France Inter radio.
Nonetheless, Lombard said that the figure was “not excellent news,” adding: “so long as we’ve not addressed the deficit and debt problem, we’re in danger.”
The French deficit is sort of double the three% goal eurozone members are presupposed to respect. The federal government plans to cut back the deficit to five.4% of the GDP in 2025, before returning below the European limit of three% in 2029.
The country can also be battling one among the very best debt ratios within the bloc. The French public debt rose to 113% of GDP in 2024, from 109.8% within the previous 12 months.
Why the smaller deficit?
Revenues accelerated by 3.1% in 2024, after the previous 12 months’s 2.2%, and got here in at €1,500.6bn. Income from taxes increased barely by 2% (+€16.1bn) after a 0.6% jump in 2023.
Spending rose by 3.9%, after a lift of three.7% in 2023, mainly driven by the rising cost of pensions indexed to inflation, together with an increase in unemployment expenses.
Preparing the subsequent budget: A ‘nightmare’?
The present administration is facing the large task of reducing spending amid weak economic growth prospects. Adding to this pressure is President Emmanuel Macron’s ambition to spice up defence spending.
The Minister for Economy said on Thursday that the federal government is bringing a couple of public finance alert committee, involving local authorities, the social sector and ministers liable for budgets. They are going to launch the committee in mid-April during a serious conference on public funds prepared by Prime Minister François Bayrou.
In accordance with the French central bank’s revised growth forecast, Europe’s second biggest economy is ready to expand by 0.7%, down from 0.9% previously— in 2025. Lombard noted that there may be indeed “significant uncertainty”, particularly around how the US tariffs are going to affect the French economy.
Earlier this week, government spokesperson Sophie Primas said that preparing the 2026 budget was shaping as much as be “a nightmare given the numerous financial difficulties”.
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