Bercy is revising his growth forecast for next year significantly downward to just 1%. We are far from the 2.5% this year and even the 1.4% that Bercy points out in his latest forecast.
Bruno Le Maire explains that France bears the brunt of 3 crises: the war in Ukraine, the rise in energy prices and the difficulties of our main economic partners: Germany, which could enter a recession, the United States and China.
But despite this very unfavorable context, France should avoid recession next year.
“Non-negotiable”
With a deficit target of 5%, Bercy absolutely wants to regain control of public finances after two years of whatever it takes, checks and aid to purchasing power.
Bruno Le Maire insists that the restoration of public accounts “is not negotiable.” And that to get back below a 3% deficit in 2027, you must start next year with a 5% deficit.
Bercy’s tenant says that it is absolutely necessary to maintain this trajectory if we want to stabilize the debt from 2026, which is Bercy’s commitment to Brussels.
In reality, it is a budget to avoid recession and further deterioration of public finances.
Bruno Le Maire thus speaks of a budget of “responsibility” in the face of the crisis. And in fact it is a budget of 3 faces:
A 3-sided budget
Protect households and businesses against inflation. Bercy has again revised upwards his inflation forecast for next year from 3.3% to 4.2% and will not go down before “during 2023”.
Protect the French also against energy prices with a tariff shield that will cost, according to Bercy, “several tens of billions of euros.”
The second objective of the budget is to restore public finances despite increased spending, despite 10-year interest rates at 2.5% and despite an expected debt load of €37 billion next year after 44 billion this year…
Finally, it is a matter of continuing with the policy of supply and tax reduction. Except that France no longer has the means to afford tax cuts. For once, Bruno Le Maire agrees with his predecessor at Bercy, the president of the Court of Auditors Pierre Moscovici…
Consequences, for companies, the CVAE will be abolished in two years and for households, the reform of inheritance rights (Emmanuel Macron’s campaign promise for the purchasing power of the French) will not appear in the budget due to lack of means.
Source: BFM TV
