The government presented its new budget forecasts on Tuesday June 28 and there are a few surprises. LThe first is on the revenue side. They are increasing significantly this year: 55 billion euros more, the equivalent of the national education budget. In any case, this is what the executive provides in its amending bill.
These good receipts are due to the good performance of employment last year, but also this year. Despite the slowdown in the economy, the government is counting on 115,000 job creations at the end of 2022, And when people work, it is social security contributions that go into the coffers, less unemployment benefits or social benefits to be paid , more taxes also on income for households, and for companies, more taxes on corporations, etc. It is virtuous.
What will the government do with this money? It promises to be the subject of a tight debate because, above all, he plans to use it to balance his budget and maintain his deficit at the same level as expected, ie at 5%. In fact, this surplus of money will above all compensate for the deterioration of our economy. Because of the war in Ukraine, which is causing fuel prices to soar, but also of China and its containment strategy which is slowing down supplies, French growth is falling. The government now forecasts 2.5% for 2022.
With this money, the government will also pay for purchasing power measures. Between the revaluation of pensions, social minima, personal housing aid, the revaluation of the index of civil servants, the extension of the tariff shield on gas, the rebate on the liter of fuel… It’s a package at 25 Billions of Euro’s.
Still, for the right, these additional revenues should be used to repay our debt. Debt which will remain at a very high level: 112% of GDP this year, according to the government, but with interest rates rising, its repayment will cost more, 17 billion euros this year. In just three months, the bill has doubled. On the left, the Nupes will on the other hand see in this “jackpot” of 50 billion euros, an opportunity to help the French even more to cope with inflation. Nupes already considers that the purchasing power package is insufficient.