Bruno Le Maire announces record budget deficit of 9.4% of GDP for 2021

In 2021, the budget deficit will be larger than expected and will reach the equivalent of 9.4% of the gross domestic product (GDP) of France. A record which can be explained by the increase in the amount of state aid to the economy.

Economy Minister Bruno Le Maire announced on May 31, on France 2, that France’s public deficit would widen again this year to reach 9.4% of gross domestic product (GDP).

This record deficit is explained, according to the minister, by the postponement of a certain number of expenses from 2020 to 2021, the continuation of aid to companies and the gradual disbursement of the recovery plan.

“It is the extension of the effort that we have made to protect our economy and at the same time the increase of this economic recovery that we want to have this 5% of growth figure which remains our objective”, added Bruno. The mayor.

This objective is less optimistic than that of most institutions such as the Banque de France, the European Commission or the OECD, which forecast in 2021 for the country a growth rebound of between 5.5% and 5.8%, after a drop of 7.9% in 2020.

However, these figures could soon be revised downwards, given the disappointing statistics of economic activity in the first quarter, ie near stability (-0.1%), against a slight increase of + 0.4% expected.

For the current year, the balance of public finances, which includes in addition to that of the State budget, those of Social Security and local communities, was initially expected with a deficit equivalent to 8.5% of gross domestic product. (GDP) of France. But it has already been revised upwards, to 9%, at the beginning of April.

The state budget deficit alone is expected to reach 220 billion, nearly 47 billion more than what was budgeted in the initial finance law, according to details from Minister of Action and Public Accounts Olivier Dussopt reported by AFP. The latter said on the channel Public Senate that the public debt would swell it to 117.2% this year, against 115.1% last year.

The government must present in the middle of the week a bill of amending finance law (PLFR) comprising more than 15 billion euros of additional emergency measures, which must be used in particular to finance the partial activity and to targeted aid for companies in difficulty.

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