the public deficit a little lower than expected

Despite new spending aimed at supporting purchasing power, France’s public deficit in 2022 should be slightly lower than expected, at 4.9% against 5% for the previous estimate, according to a second amending budget whose large lines were presented Tuesday by Bercy.

Better-than-expected tax receipts, notably from corporation tax and income tax, as well as some lower expenditures, reduced the deficit by 4.6 billion euros. “2022 is not only the year of the fight against the high cost of living, it is also the year of the fight for well-kept accounts”, assured the Minister of Public Accounts Gabriel Attal in a statement sent to the press.

2.7% growth

According to its latest macroeconomic forecasts, the government expects GDP growth of 2.7% and an inflation rate of 5.4% in 2022. This second amending budget for 2022, three months after the adoption of the first, then called “purchasing power package”, “is really in the same spirit” and has like “main objective of financing purchasing power measures for the French”according to the Ministry of Economy and Finance. “This text is the new stage in the fight against the high cost of living that we have been leading relentlessly for a year”, added Gabriel Attal.

It will include in particular the recent announcements on the payment of a new energy check for the most modest, in the amount of 1.5 billion euros, and the extension of the rebate at the pump until November 15, for 440 millions of euros.

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The text will also contain the envelope of 275 million euros announced to help universities and research organizations cope with soaring energy costs, and that of 200 million euros for fuel expenditure ministry of armies. France Competences (the regulator of work-study and vocational training) has also been granted an extension of 2 billion euros for the end of the year.

Faced with these new expenses, Bercy is delighted to “a few good surprises on certain recipes”, with a corporation tax and an income tax which should each bring in 2 billion euros more than what had been anticipated this summer. The levy on revenues destined for the European Union will also be lower than expected, also around 2 billion euros.

Review at the Assembly on November 7

Public accounts will also benefit from lower spending. For example, due to a lower than estimated number of defaults of state-guaranteed loans, granted at the height of the Covid-19 pandemic, the government will be able to take back around 2 billion euros which were planned for deal with arrears.

The amending budget must be presented Wednesday in the Council of Ministers, then the Ministers of the Economy Bruno Le Maire and Gabriel Attal will be heard Thursday in the Senate on the text, the second being also invited to speak Wednesday in the middle of the day before the Finance Committee of the National Assembly. The examination will then begin in the National Assembly on November 7, then on the 14th in the Senate.


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