According to statistics agency INSEE, last year's fiscal deficit amounted to 5.5% of economic output in public accounts in 2023, up from 4.8% the year before and well above the government's target of 4.9%.
advertisementFrance's public sector budget deficit widened faster than the government had planned in 2023, according to data released by statistics agency INSEE on Tuesday.
This meant the gap between income and spending widened further, raising questions about Macron's reputation as a fiscally stable president.
The main reason for the deficit was lower tax revenues due to France's lower growth rate last year.
The rate of spending growth slowed only moderately last year, increasing by 3.7% in 2022, followed by 4%.
French Finance Minister Bruno Le Maire warned earlier this month that the country was exceeding its budget deficit target and would need to find more money to meet next year's 4.4% gross domestic product cap. He emphasized that it was necessary.
France aims to keep its budget deficit below 3% of domestic production by 2027, in line with EU targets.
Where will the money come from in 2024?
The government has already decided on emergency spending cuts of 10 billion euros in 2024 and hopes to save 12 billion euros in 2025.
Budget Minister Thomas Cazeneuve even suggested that next year's savings target needs to be raised to 20 billion euros.
“The state's finances need to be rebalanced,” Finance Minister Le Maire said on Tuesday, adding: “It will require a great deal of determination, strategy and calm.”
Still, Le Maire has expressed opposition to tax increases to fill the budget hole.
“It is perfectly possible to cut public spending without going into the pockets of the French people, and I remain… completely opposed to increasing the tax burden on people who already pay high taxes.”
More to come…
