Highlights
The French Budget Bill for 2024 specifies a financing requirement of €299.7 billion, which represents a €10.6 billion decrease from 2023. This reduction is the result of a fall in the deficit, which has decreased by €27.6 billion to €144.5 billion. However, this drop is partially negated by the increased requirement to redeem €160.2 billion in maturing debt, which is €10.6 billion higher than the previous year. The new budget aims to cut the deficit to 5 percent of GDP next year, from 6.1 percent this year.
France will significantly rely on medium- and long-term government debt issuance, which is projected to reach €285 billion, as well as €7.7 billion in short-term securities and €6.5 billion for COVID-related debt repayments, to meet these requirements. It is anticipated that the state debt service will amount to €52.2 billion, with plans for €60 billion worth of tax hikes and spending cuts to tackle a spiralling fiscal deficit.
The national debt burden in France, which has already reached 3.2 trillion euros, is expected to reach nearly 115 percent of GDP next year. Interest payments will be the largest single budgetary expense in the coming years, surpassing even the largest-spending departments, such as defence and education.
Although tax increases will account for one-third of the 60 billion euro budget crunch, the remaining amount will be derived from expenditure cutbacks. Twenty billion of these cuts will be distributed across France's ministries, while the remaining funds will be allocated to welfare, health, pension, and local government budgets.
Furthermore, the net increase in state debt for debt maturing in a year or more will be restricted to €129.5 billion. In December 2024, a comprehensive financing plan will be presented, providing additional information regarding the French government's strategy for managing its fiscal challenges while maintaining control over borrowing costs.
France will significantly rely on medium- and long-term government debt issuance, which is projected to reach €285 billion, as well as €7.7 billion in short-term securities and €6.5 billion for COVID-related debt repayments, to meet these requirements. It is anticipated that the state debt service will amount to €52.2 billion, with plans for €60 billion worth of tax hikes and spending cuts to tackle a spiralling fiscal deficit.
The national debt burden in France, which has already reached 3.2 trillion euros, is expected to reach nearly 115 percent of GDP next year. Interest payments will be the largest single budgetary expense in the coming years, surpassing even the largest-spending departments, such as defence and education.
Although tax increases will account for one-third of the 60 billion euro budget crunch, the remaining amount will be derived from expenditure cutbacks. Twenty billion of these cuts will be distributed across France's ministries, while the remaining funds will be allocated to welfare, health, pension, and local government budgets.
Furthermore, the net increase in state debt for debt maturing in a year or more will be restricted to €129.5 billion. In December 2024, a comprehensive financing plan will be presented, providing additional information regarding the French government's strategy for managing its fiscal challenges while maintaining control over borrowing costs.
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