The government’s new forecasts show a deterioration compared to those of last spring, which forecast a deficit of 1.2% in 2022. The debt should be reduced by less than one point of GDP over the five-year term.
The government continues to downgrade its budgetary ambitions. The deficit is now expected at 1.5% of GDP in 2022, according to documents attached to the 2020 finance bill posted online this Tuesday. This figure marks a decline compared to the forecasts of last April (- 1.2% of GDP), not to mention the return to equilibrium which had been promised by Bercy eighteen months ago. It is not surprising, however, insofar as the objective for 2020 had already been revised (- 2.2% against – 2% initially) to take into account the cost of the measures taken in response to the “yellow vests” crisis. “.
Certain assumptions retained by the executive to arrive at this new budgetary balance will be looked at with attention. Bercy thus hopes that growth will remain in 2021 at the same level as in 2020 (+ 1.3%) before climbing to + 1.4% in 2022 and 2023. This slight increase would in particular be made possible by a gain in growth potential of the country from 2022, reflecting the effects of the structural reforms carried out since 2017.
End of term efforts
To keep the purse strings, the government promises the most important efforts in terms of expenditure control at the end of term of office, with the approach of the elections, which has something to leave skeptical. Thus the growth in volume (excluding inflation) of public expenditure would go from + 0.7% in 2019 and 2020 to + 0.5% in 2021 and + 0.2% in 2022. At that time, the latter would represent 52, 3% of GDP (55% in 2017). With the tax cuts initiated, the rate of compulsory levies would drop from 45.2% of GDP in 2017 to 43.9% of GDP in 2022.
As a consequence of this deterioration in the budgetary outlook, the debt is expected to decline very little over this five-year period. This is expected at 97.7% of GDP in 2022 against 98.4% in 2017. Initially, the government had promised a decrease of 5 points of GDP in five years.