France’s public deficit will ultimately be “close to 7%” gross domestic product (GDP) in 2021, said Olivier Dussopt, the Minister of Public Accounts at Sunday newspaper (JDD) of January 16, while the government was still counting on 8.2% last year.
This improvement is due to “tax revenue higher than expected” linked to stronger growth than previously estimated and the recovery of social security accounts “thanks to the resumption of employment and the receipt of contributions”, explained the Minister.
At the beginning of January, the Minister of the Economy Bruno Le Maire had already judged that the budget deficit for 2021 would be “significantly less than 8%” of GDP. Olivier Dussopt recalls that according to the latest INSEE forecast, growth should reach 6.7% in 2021, against 6.25% according to the government forecast, which dates back to September.
A deficit of 5% expected for 2022
The social security deficit “from 40 billion euros in 2020, would drop in 2021 to around 25 billion. We were expecting almost 33 billion”, explains the minister.
The State deficit would amount to 171 billion euros, i.e. “nearly 34.5 billion less compared to our latest forecasts”, said Mr. Dussopt again. “All these movements confirm our deficit forecasts at 5% in 2022, then at 3% in 2027”, he added, specifying that the rise in interest rates does not call into question the objective of a 5% deficit for this year.