France’s public debt continued to swell at the end of the second quarter, standing at 112% of gross domestic product (GDP), compared to 110.5% of GDP at the end of March, announced Friday September 27 INSEE.
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The country’s public debt, which has increased massively since the health crisis, increased by 68.9 billion euros to reach 3,228.4 billion euros between April and June, said the National Institute of statistics (INSEE).
The increase recorded in the second quarter comes mainly from the increase in state debt (+69.9 billion euros). The debt of social security administrations also increased, by 4 billion euros.
On the other hand, the debt of various central administration bodies contracted by 4.7 billion euros, and that of local public administrations by 0.3 billion euros.
The new draft budget soon to be presented
The Prime Minister’s new government Michel Barnier committed to presenting during “ the week of October 9 » its draft budget for 2025, which will mainly be placed under the sign of cuts in public spending in an attempt to consolidate seriously degraded public finances. An increase in taxation, targeted at the wealthiest and large businesses, is also envisaged.
After dropping to 5.5% of GDP in 2023, France’s public deficit will experience a further slippage in 2024 and risks exceeding 6% of GDP, warned the Minister of the Budget, Laurent Saint-Martin. This is much worse than the deficit of 5.1% of GDP on which the previous government was counting and well above the threshold of 3% set by the European Union.
Having become one of the worst performers in the euro zone, France saw its sovereign rating downgraded by the S&P Global Ratings rating agency at the end of May and is the subject of a procedure for excessive public deficits by the European Commission.
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