France’s public debt is set to reach its highest level since 1995 this year, driven by a sharp budget deficit, the French Finance Ministry said on Saturday.
اضافة اعلان
A ministry official told reporters that the public debt-to-GDP ratio is expected to reach 119.3% in 2026 and 121.7% in 2027, nearly twice the reference ceiling of 60% of GDP that European Union member states are expected to observe.
According to Agence France-Presse (AFP), these record levels are the highest since France’s National Institute of Statistics and Economic Studies (INSEE) began tracking debt levels under the current methodology in late 1995.
The official said France’s rising debt was occurring “automatically” as a result of the continued high budget deficit.
Under EU rules, the general government deficit — the annual gap between government revenue and spending — should not exceed 3% of GDP.
However, the deficit stood at 5.1% of GDP last year, while the government expects it to reach 5.4% this year.
France has been subject to enhanced monitoring by the European Union for the past two years due to its elevated deficit.
Paris expects the deficit to fall to 5% next year, when France is scheduled to hold a presidential election as President Emmanuel Macron approaches the end of his second and final term.
The government has submitted its 2027 budget proposal to the High Council of Public Finance, an independent fiscal oversight body, to assess its feasibility from a macroeconomic perspective.
Prime Minister Sébastien Lecornu said Thursday that the government plans to make adjustments and cut spending by $62 billion (€54 billion) in the 2027 budget.
However, with the election approaching, Parliament has been left to decide on some of the more politically sensitive measures, including a government proposal to reduce tax exemptions granted to retirees.
The French economy has been slowing since the third quarter of last year, affected by weak consumer spending as well as higher energy prices linked to the U.S.-Israeli war with Iran.
Source: (AFP)
