HomeEconomySliding public deficit: the head of INSEE judges Bercy too “lonely” in...

Sliding public deficit: the head of INSEE judges Bercy too “lonely” in its forecasts

According to Jean-Luc Tavernier, several economic think tanks such as the IPP, OFCE and Rexecode should work on these issues.

The director general of INSEE estimated on Wednesday that public finance experts should participate in the preparation of the budget to prevent Bercy “from being solely responsible” for forecast errors. Jean-Luc Tavernier was questioned by the National Assembly’s commission of inquiry into the decline in the public deficit in 2024.

Initially forecast at 4.4% of GDP, well above the 3% tolerated by Brussels, it should finally reach 6.1%, a figure that will be confirmed at the end of March, but which Jean-Luc Tavernier considered “realistic” . The director general of INSEE is a member of the Higher Council of Public Finances (HCFP), a body chaired by the first president of the Court of Auditors, Pierre Moscovici, and responsible for giving his opinion on the Government’s budget forecasts.

No political will

He noted that “many people publish macroeconomic hypotheses and we can see if we are in consensus,” while “this entire ecosystem” of spending forecasts and recipes does not exist. For Jean-Luc Tavernier, “certain academic laboratories must be encouraged, even by financing them, to work on these issues – he cited the Institute of Public Policy, Rexecode and OFCE.”

He considered that “from Bercy’s point of view (it would be) beneficial, because it is not good to be alone and take responsibility alone when a mistake is made.” Asked about the possible role of political will in the excessively optimistic forecasts that caused the deviation, Jean-Luc Tavernier agreed with the general explanation: “rather forecast errors that unfortunately mostly fell on the wrong side” .

“Collegiality

These were the expected but unrealized moderation of spending by local authorities, very disappointing corporate tax revenues or households saving instead of consuming, despite inflation falling to 2% on average in 2024, after 4.9% in 2023.

Finally, he criticized the conditions of the HCFP, which harm the “collegiality” of the work: “I don’t know when we will be asked to review the hypotheses of the initial financing law,” he stated. , such as a public deficit revised to 5.4% of GDP instead of 5% this year or growth reduced to 0.9% instead of 1.1%. “How do you want me to organize myself?” he asked.

Author: TL with AFP
Source: BFM TV

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