Deficit could soar beyond 6% in 2027, according to latest Bercy projections

France faces a looming fiscal challenge as recent projections suggest its public deficit could surge beyond 6% of GDP by 2027, a significant increase from current targets.

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The objective of 5% of GDP will be difficult to achieve.

According to leaked projections from the Treasury, the public deficit is estimated to reach 5.2% of GDP in 2026, exceeding the government's publicly stated goal of 5%. If no new corrective measures are taken, the deficit is predicted to balloon to 6.2% in 2027, according to reports from L'Opinion.

Sources indicate that several factors are contributing to this potential deficit increase. These include the rising cost of social benefits, which are traditionally indexed to inflation, escalating healthcare expenses, insufficient spending controls by local authorities, and the growing burden of debt due to rising interest rates. The European Commission's own projections align with this concern, forecasting a 5.7% deficit based on similar reasoning, even before accounting for slower first-quarter growth.

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Next year, the deficit could be higher than 6%.

Such a substantial deficit would be a major blow to France, which is already under scrutiny from Brussels for an "excessive deficit." A failure to implement adequate budgetary measures could lead to sanctions from the European Commission as early as late 2027, following the presidential election. In response, the Minister for Public Accounts, David Amiel, stated that the risks to the 2027 deficit will be made public. He also announced an unprecedented move: four independent economists have been commissioned to produce a report on the matter, due in July.

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The risks for the deficit in 2027 will be made public. We have commissioned - and this is unprecedented - four independent economists who will produce a report in July.