PARIS, July 15 (Reuters) – France faces a sharp deterioration in its public finances over the rest of the decade unless policymakers act quickly \u200cto curb spending, an independent report commissioned by the government said on \u200cWednesday. <\/p>\n
The report, prepared by economists Xavier Jaravel, Xavier Ragot, Jean-Luc Tavernier and Natacha Valla, projected that \u200bFrance’s budget deficit would widen from 5.0% of gross domestic product in 2026 to nearly 7% by 2030 if no corrective action is taken. Public debt would rise from 118% of GDP in 2026 to more than 130% by the end of \u200cthe decade. <\/p>\n
Commissioned in May by \u2060Finance Minister Roland Lescure, the report is intended to frame what is expected to be a contentious debate over public finances \u2060when parliament begins examining the 2027 budget from October, ahead of next year’s presidential election, which polls suggest far right veteran Marine Le Pen could win. <\/p>\n
It comes amid growing \u200bconcern that \u200bFrance’s \u20ac3.5 trillion ($4.0 trillion) public debt burden could \u200bballoon as government borrowing costs \u200coutpace economic growth. <\/p>\n
The report warned debt-servicing costs would become an increasingly heavy burden as bonds issued during years of ultra-low interest rates are refinanced at higher rates. Annual interest payments are projected to rise to \u20ac124 billion by 2030 from \u20ac78 billion this year. <\/p>\n
To stabilise the debt-to-GDP ratio during the next five-year presidential term, France would \u200cneed cumulative budget tightening worth \u20ac126 billion by 2032, \u200bthe report estimated. <\/p>\n
Delaying action until after the 2027 \u200belection would require ever larger adjustments \u200blater and could undermine investor confidence, it said. <\/p>\n
Rather than broad \u200cspending cuts, the economists called for \u200btargeted structural reforms and \u200burged policymakers to reconsider the automatic inflation indexation of some welfare benefits and pensions. <\/p>\n
Jaravel heads the national economics council, Ragot is president of the OFCE \u200bthink tank, Tavernier is \u200ca former head of the INSEE statistics agency and Valla is dean \u200bof the management school at Paris’ Sciences Po university. <\/p>\n
($1 = 0.8747 euros) <\/p>\n
(Reporting \u200bby Leigh Thomas. Editing by Mark Potter) <\/p>\n","protected":false},"excerpt":{"rendered":"PARIS, July 15 (Reuters) – France faces a sharp deterioration in its public finances over the rest of…\n","protected":false},"author":2,"featured_media":766117,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[5849,28,101,594,22389,327428,125711,327430,136806,93082,327431,327429],"class_list":["post-766116","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-budget-deficit","tag-business","tag-economy","tag-france","tag-gross-domestic-product","tag-jean-luc-tavernier","tag-marine-le-pen","tag-natacha-valla","tag-public-debt","tag-public-finances","tag-xavier-jaravel","tag-xavier-ragot"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/766116","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=766116"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/766116\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/766117"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=766116"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=766116"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=766116"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}