Advertisement

French budget deficit rose to 5.5% in 2023

French budget deficit rose to 5.5% in 2023

Statistics agency Insee announced this week France's budget deficit jumped to 5.5 percent last year. Prime Minister Gabriel Attal told new channel TF1 on Wednesday the expected target in the medium-term budget plan – to be presented in September – would bring the deficit back to 2.7 percent GDP by 2027.

This would translate to 50 billion in savings, according to the Court of Auditors.

The French government's target is an unlikely success: Moody's

Economy Minister Bruno Le Maire will meet majority and opposition parliamentarians this Thursday in Paris to form the 2025 budget. Attal said the policy document is scheduled to be presented at the end of June.

The prime minister floated slashed unemployment benefit durations to meet the shortfall. The government also this week announced an additional ten billion dollars would be cut to reach the deficit target of 4.4 percent of GDP for the current year.

Rating agency Moody's warned this measure and other budget cuts were unlikely to fix the problem or bring the deficit below 3 percent in the next three years.

"The budget deficit highlights the risks inherent in the government's medium-term fiscal strategy, which is based on optimistic economic and revenue assumptions and unprecedented restrictions on spending," the agency said.