French economic growth will be less vigorous than expected in 2024, with a forecast reduced to 1%, announced Sunday February 18 the Minister of the Economy Bruno Le Maire, unveiling 10 billion in "immediate" savings to meet the ambitions of deficit reduction.
This growth forecast "takes into account the new geopolitical context", explained the Minister of the Economy on TF1, referring to the war in Ukraine, the Middle East, the "very marked economic slowdown in China" and "a recession in 2023 in Germany".
Faced with lower-than-expected tax revenues and to meet its budgetary objectives of a public deficit of 4.4% of gross domestic product (GDP) in 2024 (compared to 4.9% anticipated for 2023), the State will " an immediate effort of 10 billion euros in savings,” explained Bruno Le Maire.
“It is not Social Security that we are going to touch, it is not the local authorities that we are going to touch,” insisted the minister.
The economies should not require a new law but "we also keep the possibility" of an "amending budget in the summer depending on economic circumstances and depending on the geopolitical situation, in particular the evolution of the war in Ukraine", also noted Bruno Le Maire.
Half of the savings, or five billion euros, will have to be found in the operating budget "of all ministries", explained Bruno Le Maire, for example on energy expenditure or purchases.
The government will also "reduce public development aid by almost a billion euros" and lower the MaPrimeRénov' energy renovation aid envelope by another billion euros.
“We had announced an additional envelope of 1.6 billion from 2023 to 2024” and “there will always be an increase of 600 million, but we are recovering 1 billion,” noted the minister.
The budget devoted to the ecological transition reduced
A "third series of savings", of a billion euros in total, will concern "State operators", according to Bruno Le Maire who mentioned in particular the National Agency for Territorial Cohesion, Business France , France Competences or the National Center for Space Studies.
The minister "chose injustice", reacted Anne Bringault, director of programs at the Climate Action Network, denouncing "savings at the expense of the most vulnerable", on public development aid and support for thermal renovation. “The climate and purchasing power will be the losers,” she says.
The increase in the budget devoted to the Ecological Transition is reduced from 10 billion to 8.6 billion, Minister Christophe Béchu said in a press release, praising “an unprecedented increase” in his budget.
The increase in the Green Fund "initially planned at 500 million euros, will be limited to 100 million euros", said his office.
The idea of a tax increase postponed
After 0.9% growth in 2023, the government had previously forecast a 1.4% increase in GDP this year. It now aligns with the estimates of other institutions: the Banque de France expects growth “close to 0.9%”, the International Monetary Fund forecasts 1% and the OECD 0.6%.
However, it is on this prospect of a more vigorous economy that the budget for the current year is based.
Because rather than tax increases, the executive was counting on a surplus of activity as well as considerable savings to reduce a debt of more than 3,000 billion euros, with the prospect of bringing the deficit below the European limit of 3% in 2027.
“We will not increase taxes,” insisted Bruno Le Maire and “we will maintain the tax cut” announced for the middle classes.
“The savings announced will allow us to maintain our debt reduction trajectory,” reacted Jean-René Cazeneuve, general budget rapporteur to the National Assembly.
With AFP
The France 24 summary of the week
invites you to look back at the news that marked the week
I subscribe
Take international news everywhere with you! Download the France 24 application