The rating agency Moody’s considers it “unlikely” that France will meet its deficit reduction objective by 2027

The American rating agency Moody’s judged on Wednesday March 27 “unlikely” that France maintains its objective of reducing the public deficit to 2.7% by 2027. She estimated that the 10 billion additional savings in 2024, announced by the executive in February, would be insufficient to “put the government back on track” planned budget.

The announcement of a slippage in the deficit to 5.5% of gross domestic product in 2023 “makes improbable” the government meeting its deficit reduction objective by 2027 “as provided for in its medium-term budget plan presented in September”, writes Moody’s in a press release. The American agency plans to update the French note on April 26.

A deficit “due to lower than expected revenue”

INSEE said on Tuesday that the deficit, at 5.5% of GDP in 2023, had exceeded the government forecast of 4.9% by 15.8 billion euros and 0.6 percentage points. , further complicating the debt reduction objective stated by the French Minister of the Economy. Bruno Le Maire nevertheless reaffirmed on Tuesday his “total determination” to return below the 3% public deficit in 2027.

“The larger-than-expected deficit is almost entirely due to lower-than-expected revenue”, adds Moody’s. This higher deficit “underscores the risks inherent in the government’s medium-term budgetary strategy, which is based on optimistic economic and revenue assumptions, as well as unprecedented cuts in spending”judges the rating agency.