The High Council of Public Finances calls for "prudent" budgetary assumptions

The HCFP issues this recommendation in its opinion on the end-of-management finance bill (PLFG) presented to the Council of Ministers on Wednesday, which sets out the budgetary adjustments to be made at the end of the year.

The HCFP considers that the growth hypothesis of 1,1% this year which appears there "remains realistic", that an average inflation of 2,1% is "also realistic", although "a little high" while it is now well below 2% on an annual basis.

The forecast of a public deficit of 6,1% of GDP in 2024 "remains plausible".

But the HCFP notes that the latter, estimated at 4,4% in the 2024 finance bill (PLF), has experienced "a major slippage", due to overly optimistic initial revenue forecasts.

These are now expected at 1.250,7 billion euros instead of 1.292,2 billion in the PLF, "a difference of 41,5 billion euros", notes the High Council.

The PLFG also includes 15 billion euros of additional expenditure: those of the State are revised very slightly downwards, but those of the Social Security are increased by 3,5 billion euros, and, above all, those of local authorities are increased by 13,4 billion euros.

This "shows the need, in order to present a reliable trajectory for public finances, to retain prudent hypotheses in financial texts, particularly in terms of forecasting revenue or moderating local authority expenditure", notes the HCFP, which is chaired by Pierre Moscovici, First President of the Court of Auditors.

For the High Council, "the trajectory of the medium-term budgetary and structural plan" (PSMT) presented in October, which provides for the return of the public deficit below 3% of GDP in 2029 instead of 2027 until then, is "a more relevant reference". But it regrets not having obtained all the elements "to assess its realism".

Finally, he highlights the 2,9 point increase in debt this year, to 112,8% of GDP, and calls on France to respect the PSMT so as "not to see its position continue to erode within the Eurozone", of which it is the third most indebted country behind Greece and Italy.