French finance ministry warns of worsening deficit

PARIS — France’s public deficit this year could be far worse than forecast because the country is expecting less tax income than previously thought.
The budget deficit — the difference between how much a country spends and receives — could reach 5.6 percent of the country’s GDP instead of the 5.1 previously predicted, according to a note sent on Monday by the French finance ministry to lawmakers in charge of the budget, and obtained by POLITICO.
The note stressed that the figure is not the country’s official deficit forecast but just a predicted worst case scenario.
The gloomy warning comes as France is doing without a government and is under increased EU scrutiny, known as an excessive deficit procedure, for an overspend in 2023.
France already revised its deficit target for 2024 from an initial 4.4 percent of GDP to 5.1 percent. It also missed its deficit target last year (5.5 percent of GDP instead of 4.9 percent.)
The outgoing government has made it clear that it will be the responsibility of its successor to present the budget for 2025 and address its spending plans to the European Commission as part of the excessive deficit procedure.
France has to send to Brussels a multi-year plan to slash spending by September 20, but this deadline can be extended until October 15. Under French law, the government has to submit the budget to the parliament by October 1.
To speed up things, the outgoing government has started preparatory work, proposing to freeze spending at the same level as this year (€492 billion) instead of significantly cutting it.