France: Growth enables slight reduction in debt and deficit in 2021 – zimo news


After surging in 2020 due to the health crisis, the public debt ratio began to fall slightly last year to 112.9% of GDP, while the public deficit narrowed slightly to 6.5%, INSEE said on Tuesday.

While public finances began to improve as the economy rebounded in 2021, the absolute value of debt increased by a further nearly EUR 165 billion to EUR 2,813.1 billion, while the public deficit reached EUR 160.9 billion versus EUR 20.55 billion. $1 billion by the end of 2020.

Debt soared to 114.6 percent last year and the deficit widened to 8.9 percent, a record high, according to revised data released by the National Bureau of Statistics.

If 2021’s public accounts look a little better, it’s largely due to a strong 7% rebound in the French economy after the country suffered a historic 8% recession in 2020 due to the health crisis.

The recovery notably saw state and administrative revenue rebound “strongly” by 8.4%, INSEE highlighted, or +101.8 billion euros.

Restoring employment has significantly boosted contributory income, thereby reducing the burden on social security accounts.

Over the year, public administration expenditures (state, local authorities and social security) increased by 4%, or +57.1 billion euros. They thus account for 59.2% of GDP, maintaining “above pre-crisis levels”, INSEE noted.

Growth was stronger than expected, and those results were slightly better than the government expected last fall, as it was counting on a public deficit of 8.4% and debt of 114%.

This year, he plans to reduce the public deficit to 5% of GDP at this stage, especially since dynamic growth of 4% is still maintained. But that was before the Ukrainian war broke out and new spending was announced to fight inflation.

In 2019, before the health crisis, debt was 97.6% of GDP and the deficit was 3.1%.

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