Reduction of public debt: the government deemed “too optimistic” by the Court of Auditors

Are Bruno Le Maire's forecasts too optimistic ? MAXPPP – ALAIN JOCARD/POOL

France risks not achieving its public debt reduction target this year, due to overly optimistic forecasts, and additional budgetary savings may be necessary, the Court of Auditors said on Tuesday. The government plans to reduce the public deficit this year to 4.4% of gross domestic product (GDP).

To this end, last month he already announced 10 billion euros in additional savings in order to compensate for a lower-than-expected level of growth. In an annual report, the Court of Auditors, however, estimated that these new savings might not be sufficient, calling on the government to take additional measures.

"The deficit forecast for 2024 is optimistic, even difficult to achieve, due to assumptions that are still too favorable on revenue growth" , is written in the document. "If the government took care to announce a savings target of 10 billion euros alongside the downward revision of growth planned for 2024, it did not" #39;is not certain that this is sufficient to maintain the deficit forecast."

Reduce growth forecasts ?

The Minister of Economy and Finance, Bruno Le Maire, declared last week that the public deficit for 2023 should settle at "significantly beyond" of the government target of 4.9% of GDP due to the loss of tax revenue.

The Court of Auditors invited the government to revise downwards anticipated tax revenues, stressing that the growth forecast "too optimistic" from 1.4% was lowered in February to 1%.

Bruno Le Maire announced that an amending finance bill could be necessary in the summer, suggesting further cuts just after the European elections in June, while aid to farmers and additional support for Ukraine announced by the government have already mitigated the 10 billion euros in savings.

The head of state, Emmanuel Macron, intends to bring France's public deficit below the 3% ceiling by 2027, the end of his second term. of GDP set by the European Union.