France’s budget deficit for 2024 reached 5.8% of GDP, widening from 5.4% in 2023 but remaining below the government’s forecast of 6.0%, according to statistics agency Insee. This smaller-than-expected shortfall offers some relief as the country navigates fiscal challenges exacerbated by post-pandemic recovery and inflation.
The government aims to reduce the deficit to 5.4% in 2025 and meet the EU’s 3% target by 2029. However, weak economic growth and increased defense spending could complicate these plans. Finance Minister Eric Lombard reaffirmed the commitment to fiscal discipline, suggesting cuts will be necessary in other areas.
Public spending grew by 3.9% in 2024, slightly above the 3.7% increase in 2023, while tax revenue growth improved to 3.1% from 2.2%. France’s public debt also rose - to 113% of GDP from 109.8% of GDP in 2023 and significantly higher than the pre-pandemic level of 97.9% in 2019.
Despite recent warnings from credit-rating agencies, the narrower deficit provides the government with a better foundation for stabilizing public finances.