France’s 2024 budget deficit is projected at 5.8% of GDP, slightly lower than expected but still the highest in the eurozone. Despite improved revenue and managed expenses, government officials express concern over the deficit’s impact on national sovereignty. Public spending has risen sharply, driven by social benefits, and debt has increased significantly. The government aims to reduce the deficit to 5.4% by 2025 and below 3% by 2029, while facing economic challenges and geopolitical pressures.
France’s 2024 Budget Deficit: A Closer Look
As the French government grapples with the complexities of financing defense and crafting the next budget, the forecast for 2024 reveals a budget deviation that is slightly less severe than initially expected. Despite this positive adjustment, France continues to hold the title of having the highest budget deficit in the eurozone.
According to the National Institute of Statistics (Insee), the public deficit for 2024 is projected to hit 5.8% of the gross domestic product (GDP), translating to 169.6 billion euros. This figure, while below the anticipated 6%, marks an increase from the 5.4% deficit recorded in 2023.
Government Reactions and Future Plans
Economy Minister Eric Lombard attributed the better-than-expected results to “well-managed expenses” towards the end of the year, coupled with improved revenue figures in the final weeks. However, he cautioned that this outcome does not signify good news, as the deficit remains excessively high, raising concerns regarding national and financial sovereignty.
Insee also highlighted that public spending is accelerating, now accounting for 57.1% of GDP in 2024, with social benefits—especially pensions—contributing significantly to this rise. Local authorities have also increased their investment spending.
France’s debt has escalated by 202.7 billion euros throughout 2024, reaching 113% of GDP, or approximately 3,305.3 billion euros. This positions France behind only Greece and Italy in terms of debt levels, up from 109.8% the previous year.
Looking ahead, the government aims to reduce the deficit to 5.4% of GDP by 2025 and ultimately bring it below the European Union’s threshold of 3% by 2029. Senior economist Maxime Darmet from Allianz Trade remarked that the current lower deficit makes this target seem “achievable,” especially amidst a deteriorating macroeconomic landscape.
A public finance conference is slated for April 15, led by Prime Minister François Bayrou. This gathering will provide an opportunity for various stakeholders, including elected officials and social partners, to review the nation’s budgetary situation as of March’s end.
Despite these efforts, the government’s scope for maneuver is limited given the fragmented political landscape and growing economic pressures. The Bank of France has downgraded its growth forecast for 2025 to 0.7%, potentially prompting the government to adjust its own predictions of 0.9%, should international tensions escalate.
Chief economist Sylvain Bersinger at Asterès criticized the long-standing trend of deferring financial issues through increased debt and deficits, pointing out that rising sovereign rates are making this debt increasingly costly. In 2024, France’s interest payments reached 58 billion euros, approximately 2% of GDP, which is roughly equivalent to the annual defense budget.
Against this challenging backdrop, the government faces the task of securing additional funds to support increased military expenditure, driven by the perceived threats from Russia and broader geopolitical shifts. Sophie Primas, the government spokesperson, acknowledged the daunting challenge ahead, describing the preparation of the 2026 budget as “a nightmare.”
In response to the situation, Amélie de Montchalin has firmly rejected any plans to raise taxes, emphasizing that France already has the highest deficit in the eurozone and the highest tax levels in the OECD. She argued against a mechanical increase in taxes, while also indicating a willingness to review over 400 tax loopholes to seek greater financial efficiency.