Barthélémy Philippe with AFP, edited by Yanis Darras 08:40, March 28, 2023Deficit, debt... INSEE publishes this Tuesday the figures of the French public accounts. If the deficit is less than 5%, the debt stabilizes in 2022, but should quickly cross the symbolic bar of 3,000 billion euros, as the debt has increased over the last ten years.
This is a welcome respite for the French economy. INSEE has just published the figures of the public accounts for 2022, a bit better than expected. In detail, the deficit has stabilised at 4.7% this year, even though the executive expected it to lie at 5%. The debt amounts to nearly 2.950 billion euros. Economic growth of 2.6 percent recorded last year in France helped bring public debt down to 111.6 percent of gross domestic product (GDP), from 112.9 percent in 2021, in line with government expectations.
But this figure, below the symbolic threshold of 3,000 billion euros of debt, should be reached quickly, as the indicator is in the red.
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Covid-19, an accelerator
Because since 2014, the debt has increased by nearly 1,000 billion euros, with a memorable second quarter of 2020: in just three months, the State had then gone into debt of nearly 200 billion euros. The result of "whatever it takes" during the Covid-19 period, which preceded other debts such as the tariff shield.
"Faced with economic shocks of great magnitude, the State has played the role of shock absorber of crises, and the counterpart is the legacy of a relatively high debt and deficit," explains the economist Mathieu Plane at the microphone of Europe 1.
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"Produce more, spend less"
So, to tackle the subject, Bercy relies on a diptych: "Produce more, spend less". "Produce more" refers in particular to the reindustrialization policy desired by the government, while "spend less" is reflected in the review of public spending, launched in recent weeks.
The latter should lead to several billion euros in savings in the 2024 finance bill. But more is likely to be needed to achieve the target of a public deficit below 3% of GDP by 2027.