If France does not manage to provide itself with a real budget and sticks only to the “special law” promulgated this Saturday, December 21, its public deficit would be between 6.1% and 6.4% in 2025 from GDP, according to a study.
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The special law promulgated this Saturday, December 21 by Emmanuel Macron to collect taxes and finance the State and Social Security, even without a budget, will reduce the adjustment initially contained in the finance bill for 2025. ” Without new measures, the public deficit would be between -6.1% and -6.4% of GDP in 2025 », Estimates the French Observatory of Economic Conditions (OFCE) in a study.
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Budgetary policy as outlined in the Social Security finance and budget bills, presented under the leadership of the former Prime Minister Michel Barnier“ implied a budgetary restriction of 1.5 points of GDP ”, broken down into 0.9 points of “ new measures in compulsory deductions » and 0.6 points of “ effort on public spending », Estimates the economic research center of Sciences Po Paris.
But the censorship of Michel Barnier’s government made it impossible to adopt these bills, which notably provided for 27.1 billion euros in new measures in compulsory deductions (including more than 20 billion borne by businesses). Without adoption, this amount falls from 27.1 to 5.8 billion euros. “ If the abandonment of the finance bill is favorable for households, particularly the wealthiest, the freezing of the income tax scale and the end of the tariff shield should weigh on the purchasing power of households, in especially those from the middle classes », calculates the OFCE.
A more positive effect on growth?
On the other hand, its economists believe that the special law could have a “ less negative impulse » on growth and carrying it « up to 1.4% in 2025 compared to 0.8% » previously anticipated. “ Uncertainty and budgetary indecision, fueled by an unprecedented political situation, could (Also) play the other way and bring activity growth back to our forecast for 2025 (0.8%),” they qualify.
The special law is “ supposed to be transitional, the time to adopt a finance law », recalls the OFCE, without which there remains a risk of “ fiscal cliff “. As Prime Minister François Bayrou has still not announced the composition of his government, the finance law for 2025 is still far from being a reality.
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