The Higher Council of Public Finance issues its first opinion on the pension reform, and its consequences on public accounts in 2023 will be “insignificant”. The reform will not enter into force until September 1. And on this date, according to the analysis of the Superior Council, only 50,000 people will retire three months later, due to the raising of the legal age. This change will mean a saving of 200 million euros.
But the reform will also involve additional spending, estimated at 600 million euros: 400 million for raising the minimum pension to 85% of the net minimum wage, “whose precise conditions, however, are yet to be determined, and whose cost is the possible new net funding,” $100 million for hardship and burnout, and $100 million for work-retirement transitions.
In total, the pension reform will therefore have “a very small impact on public finances in 2023 with an estimated net cost of 400 million euros.” A marginal amount in the balance of the pension system, which alone weighs 340,000 million euros of spending per year.
Macroeconomic forecasts remain “optimistic”
The reform will be carried out through a social security finance reform bill, which is why the Higher Council of Public Finance is also asked to rule on the Government’s macroeconomic forecasts… which do not vary with respect to to those of the latest finance bill. Bercy continues to count on growth of 1%, a public deficit of 5% and a debt of 111.2% this year.
The government does not hide it: it assumes a “voluntary” state of mind in the face of the economic situation and uncertainties. Bruno Le Maire reiterated this again last week at BFM Business at the Davos Economic Forum.
During the presentation of the budget at the end of September, the Higher Council for Public Finance was skeptical about the Executive’s forecasts, considering them too optimistic given the increase in inflation, the energy crisis and the tightening of monetary policies.
Since then, the Superior Council recognizes that the economic situation has improved somewhat, and that wind power has shown greater dynamism since the end of the year, particularly with a sharp drop in energy prices.
But despite this better-than-expected backdrop, these experts believe the government is still too optimistic: the economists’ consensus on France’s growth in 2023 is only 0.2%. And regarding inflation, the government expects a drop to 4.2%, while the consensus is 4.8%.
Clearly, the Higher Council for Public Finance criticizes the Government for continuing to bet on good surprises… although today they are more plausible than when the budgets were presented at the end of September.
Source: BFM TV
