PARIS: France’s budget deficit overshot forecasts last year, official figures showed Tuesday, undermining President Emmanuel Macron’s promise to bring national finances back on track within the next four years.
The public deficit jumped to 5.5% of gross domestic product, or 154 billion euros (167 billion dollars), statistics agency INSEE said.
The slippage was major and a very rare in French budgetary history, said Pierre Moscovici, the head of the Cour des Comptes (Court of Accounts), country’s top audit institution tasked with watching over fiscal responsibility, AFP reported.
The government had already warned over recent weeks that it would not meet its own deficit estimate of 4.9% of GDP, citing the international economic slowdown and the war in Ukraine as key factors.
Fiscal receipts had turned out much worse than forecast in 2023, the government said Tuesday.
France’s spending cuts
France has announced ten billion euros of spending cuts to achieve its deficit target for this year of 4.4 percent of GDP.
Bruno Le Maire, French Economy Minister, said Tuesday that he was totally opposed to any tax hike to reduce the gap. We can make savings on public spending without digging into the people’s pockets, he told RTL radio.
Like all eurozone countries, France is also committed to keeping its deficit to below 3% of GDP.
That requirement, agreed between European Union (EU) members as part of their Stability and Growth Pact, has been suspended since 2020 first to allow nations to deal with the COVID-19 pandemic, and then with the economic effects of Russia’s invasion of Ukraine.
