France: Public debt climbs to 112% of GDP at the end of the second quarter, according to INSEE

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France's public debt continued to swell at the end of the second quarter, reaching 112% of the product gross domestic product (GDP), compared to 110.5% of GDP at the end of March, INSEE reported on Friday. 

The country's public debt, which has increased massively since the health crisis, increased by 68.9 billion euros to reach 3,228.4 billion euros between April and June, the National Institute of Statistics said. 

The increase recorded in the second quarter is mainly due to the increase in the State debt (+69.9 billion euros). The debt of social security administrations also increased, by 4 billion euros. 

On the other hand, the debt of various central government bodies contracted by 4.7 billion euros, and that of local government by 0.3 billion euros. 

The new government of Prime Minister Michel Barnier has pledged to present its 2025 budget during the “week of October 9”, which will mainly focus on cuts in public spending in an attempt to clean up seriously degraded public finances. An increase in taxation, targeting the wealthiest and large companies, is also being considered. 

After dropping to 5.5% of GDP in 2023, France's public deficit will experience a new slippage in 2024 and risks exceeding 6% of GDP, warned the Minister of the Budget, Laurent Saint-Martin. 

This is much worse than the deficit of 5.1% of GDP on which the previous government was counting and well above the 3% threshold set by the European Union. 

Having become one of the bad pupils of the eurozone, France has seen its sovereign rating downgraded by the rating agency S&P Global Ratings at the end of May and is the subject of a procedure for excessive public deficits by the European Commission. 

 

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