France: Growth reduces debt and deficit burden slightly in 2022

The Minister of the Economy, Bruno Le Maire, praised the resilience of the French economy. AP - Andrew Medichini

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Continued growth has made it possible to reduce the France's public debt and deficit burden in 2022 relative to gross domestic product (GDP). But the public debt has increased in absolute value, approaching 3,000 billion euros, as indicated on Tuesday, March 28 by INSEE.

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Economic growth of 2.6 percent recorded last year in France has reduced public debt to 111.6 percent of gross domestic product (GDP), from 112.9 percent in 2021, in line with government expectations.

The public debt of the France, which has massively increased with the health crisis and inflation exacerbated by the war in Ukraine, has however increased in absolute value by 126.4 billion euros compared to 2021, reaching 2,950 billion euros, detailed the National Institute of Statistics (INSEE).

The public deficit is however doing better than expected, at 4.7% of the GDP in 2022 against 6.5% the previous year, falling below the target of 5% that was posted by the executive. In value, it stood at 124.9 billion euros, benefiting from revenues remaining "dynamic" with an increase of 7.3% to 95.7 billion euros, according to INSEE. Revenue reached 53.4 percent of GDP, up from 52.6 percent in 2021, while spending fell to 58.1 percent of GDP, from 59.1 percent.

Bruno Le Maire hails the "resilience" of the French economy

The Minister of the Economy, Bruno Le Maire, praised the "resilience" of the economy that led to this improvement, while reaffirming his "determination (...) total" to restore public finances. Because if the public accounts look a little better in 2022, the public debt and deficit remain well above their pre-crisis level in 2019, because of the massive "whatever it costs" deployed by the government to support households and businesses.

To restore public finances, the government is mainly counting on a faster increase in GDP than spending, which would be the subject of "several billion euros in savings" in the draft finance (PLF) 2024. It plans to present its multiannual trajectory for public finances by mid-April. At this stage it is counting on a public deficit of 5% in 2023 which would be gradually brought below the European limit of 3% in 2027, while debt would stabilise at 110.9% over this horizon.

(

With AFP)

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