France’s budget deficit is projected to rise to 5.6% of its GDP in 2024, exceeding the previously targeted 5.1%, according to a warning from the French finance ministry. The increase is primarily due to declining tax revenues and rising expenditures, including costs associated with the security crisis in New Caledonia.
If no additional savings are implemented, the deficit could grow even further, reaching 6.2% by 2025. To meet the government’s target of a 4.1% deficit, spending cuts amounting to €60 billion would be necessary.
Outgoing Finance Minister Bruno Le Maire has called for immediate budget cuts to control the deficit, while leftist lawmaker Eric Coquerel suggests that raising taxes might be a more suitable approach.
President Emmanuel Macron is facing growing pressure as he works to form a new government after recent parliamentary challenges. The upcoming budget deadline adds another layer of complexity to the situation.
France had already revised its deficit target for 2024 from an initial 4.4% of GDP to 5.1%, and the country also missed its deficit target last year.
The finance ministry’s warning highlights the urgency of taking decisive measures to address the expanding budget gap. The debate between opting for spending cuts or tax increases is likely to be a central issue as the government shapes its fiscal policy in the coming months.
