Michel Barnier’s finances relies on “optimistic” assumptions, in keeping with the High Council of Public Finances | EUROtoday

After two years of spectacular slippage in public accounts, forecast errors and maybe a dose of deception, is the finances for 2025 ready in two weeks by Michel Barnier credible this time? Sincere ? The first to look at the federal government’s copy, the High Council of Public Finances issued a combined opinion on Thursday, October 10.

According to this physique, which depends upon the Court of Auditors, the aims displayed by the brand new Prime Minister don’t appear unreasonable or incoherent, as these of earlier governments could have been. However, many hypotheses stay “optimistic”, and the general deficit forecast is judged ” fragile “. Clearly, lowering this public deficit to five% of gross home product (GDP) in a single yr, as the manager goals, guarantees to be very difficult, with out seeming totally unimaginable. “There is more reason than in past years, no caution yet,” summarizes Pierre Moscovici, the president of the High Council of Public Finances and the Court of Auditors.

Building your finances on favorable forecasts to be able to alleviate preliminary constraints is a good traditional. But this will result in the worst, as for the 2024 finances. During its presentation by Bruno Le Maire, then Minister of the Economy, in September 2023, the deficit of the State, communities and Social Security ought to thus be decreased to 4.4% of GDP. In actuality, the preliminary relatively unrealistic assumptions, notably relating to tax revenues and public spending, didn’t materialize. Result: the deficit rose to six.1% on the finish of December, in keeping with the most recent forecasts. A big hole, of the order of 52 billion euros. With the specter of further disagreeable surprises between now and the tip of the yr.

The evaluation of progress “a little high”

So the deficit forecast for 2024 stays “affected by a non-negligible uncertainty”, slips the High Council into its opinion, regretting that, for the reason that crimson alert this summer season, the manager has not launched “more effective braking measures”. Due to lack of a majority within the National Assembly, Michel Barnier has, particularly, given up on proposing an amending finance legislation for 2024, which might have made it doable to instantly elevate sure taxes or cancel sure bills.

For 2025, the macroeconomic situation retained by the federal government “is generally fragile”, as a result of it’s as soon as once more primarily based on quite a few optimistic hypotheses, notes the High Council. Inflation? Expected to be 1.8% in 2025, it “seems a little high considering the extent of the disinflation movement observed since the start of this year”.

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