France’s public debt continued to increase 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, INSEE indicated this Friday.
The country’s public debt, which has increased enormously since the health crisis, increased by 68.9 billion euros to reach 3,228.4 billion euros between April and June, according to the National Institute of Statistics. The increase recorded in the second quarter comes mainly from the increase in State debt (+69.9 billion euros). The debt of the social security administrations also increased, by 4 billion euros.
On the other hand, the debt of various central administration bodies was reduced by 4.7 billion euros and that of local public administrations by 300 million euros.
Reduction of public spending
The new government of Prime Minister Michel Barnier has committed to presenting during “the week of October 9” its draft budget for 2025, which will mainly be under the sign of public spending cuts in an attempt to consolidate strongly public finances. degraded. An increase in taxes is also planned, aimed at large companies and the richest.
After falling to 5.5% of GDP in 2023, France’s public deficit will experience a new decline in 2024 and risks exceeding 6% of GDP, warned Budget Minister Laurent Saint-Martin. This is much worse than the previous government’s 5.1% GDP deficit and well above the 3% threshold set by the European Union.
France, which has become one of the worst performing countries in the euro zone, had its sovereign rating downgraded by the rating agency S&P Global Ratings at the end of May and is the subject of an excessive public deficit procedure by the European Commission.
Source: BFM TV
