On Thursday, the government presented its traditional economic stability program with relatively optimistic forecasts given the multiple geopolitical uncertainties (gas cut in Russia, slowdown in US growth, etc.).
Bercy thus has a growth of 2.5% this year. A forecast in line with that of the Banque de France but higher than that of INSEE (2.3%). For the remainder of the five-year term, there is no recession in sight. French GDP should continue to grow, although at a slower pace according to the executive: +1.4% in 2023 (compared to 1.2% for the Banque de France), +1.6% in 2024, +1.7% in 2025 and 2026 and +1.8% in 2027.
Growth levels that, according to Bruno Le Maire, will be possible thanks to the different reforms undertaken, whether in pensions, unemployment insurance, the reduction of taxes on production, professional training or the France 2030 plan.
Inflation without tobacco (IPCHT) should, for its part, reach 5.1% this year (5.6%, according to the Banque de France) before slowing to 3.3% in 2023, then falling below 2 , % in 2024 (1.9%) and stabilize during the following three years (1.75%).
The public deficit below 3% in 2027
Through this stability programme, Bruno Le Maire also wants to send a strong signal to Brussels: with a serious budget, France will be able to straighten out its public accounts.
At 5% in 2022 and 2023, the public deficit would gradually decrease to below the famous 3% in 2027 (2.9%), as the Government has promised. This trajectory should allow public debt to begin to be reduced from 2025 (113.3% of GDP) to reach 112.5% in 2027. A level that would still remain above that observed today (111.9%).
“Increase growth faster than spending”
To meet these commitments, state and local authorities will be called: the volume expenditure of the former will be reduced by 0.4% and the government will propose to the latter to reduce their operating costs by 0.5%. In total, public spending over the five-year period would only increase by 0.6% in volume.
“This rate of increase in public spending in volume is the lowest for twenty years,” said Bruno Le Maire, assuring that the increase in public spending was around 2% in the last two decades. “I think there is no clearer example of our will to control public spending in France,” added the Economy Minister.
However, social spending will increase by 1.3% in volume and value for the social sphere, the hospital, health policy and social management.
Usually scheduled for April, the presentation of the stability program has been postponed for a few weeks this year due to the presidential elections. The text will be debated shortly in the Assembly (without a vote) before being sent to Brussels.
Source: BFM TV
