French deficit came in lower than expected in 2024 but risks remain #FrenchFinance

The French public deficit came in at €169.6 billion in 2024, 5.8% of GDP, as revenues accelerated and spending did not grow as much as in the previous year. That’s according to the French statistics office INSEE’s first account of the public finances for last year, subject to revision in May.

Minister of the Economy Eric Lombard attributed the result to “very tight spending by Michel Barnier’s government” at the end of the year, as well as “slightly” better-than-expected revenues in recent weeks, in an interview with France Inter radio.

However, Lombard said that the figure was “not good news,” adding: “as long as we haven’t addressed the deficit and debt problem, we are at risk.”

The French deficit is almost double the 3% target eurozone members are supposed to respect. The government plans to reduce the deficit to 5.4% of the GDP in 2025, before returning below the European limit of 3% in 2029.

The country is also battling one of the highest debt ratios in the bloc. The French public debt rose to 113% of GDP in 2024, from 109.8% in the previous year.

Revenues accelerated by 3.1% in 2024, after the previous year’s 2.2%, and came in at €1,500.6bn. Income from taxes increased slightly by 2% (+€16.1bn) after a 0.6% jump in 2023.

Spending rose by 3.9%, after a lift of 3.7% in 2023, mainly driven by the rising cost of pensions indexed to inflation, along with a rise in unemployment expenses.

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The current administration is facing the enormous task of reducing spending amid weak economic growth prospects. Adding to this pressure is President Emmanuel Macron’s ambition to boost defence spending.

The Minister for Economy said on Thursday that the government is bringing about a public finance alert committee, involving local authorities, the social sector and ministers responsible for budgets. They will launch the committee in mid-April during a major conference on public finances prepared by Prime Minister François Bayrou.

According to the French central bank’s revised growth forecast, Europe’s second biggest economy is set to expand by 0.7%, down from 0.9% previously— in 2025. Lombard noted that there is indeed “significant uncertainty”, particularly around how the US tariffs are going to impact the French economy.

Earlier this week, government spokesperson Sophie Primas said that preparing the 2026 budget was shaping up to be “a nightmare given the significant financial difficulties”.