5 Figures From the French 2018-2022 Stability Program

On 11 April 2018, the French Minister of Economy and Finance, Bruno Le Maire, and the French Minister of Public Action and Accounts, Gérald Darmanin, presented both the Stability Program and the National Reform Program in the Council of Ministers. The Stability Program is handed over every year, in April, to the European Commission, which then assesses the text through the European Council. 

What are its key lessons? Will the announced growth - with a reduced deficit of 2.6% in 2017 - keep up until the end of the presidential term? The answer lies in the 5 key figures mentioned in this year’s Stability Program. 

2.5%

Public spending increased by 2.5% in 2017 (in value and outside tax credits). However, this significant increase was contained by several regulations measures, which allowed for the decrease of part of public spending in the GDP from 56.6% in 2016 to 56.5% in 2017. It should increase by 1.8% in 2018. 

45.4%

This is the percentage of mandatory levies reached in 2017, after 44.6% in 2016. This increase is first and foremost due to an exceptionally high spontaneous growth. The income dynamism has been supported by the increase of wages and profit by companies. The State is hoping for a 44.3% ratio by 2022. 

2.0%

This is the GDP growth rate reached by France in 2017, following 1.6% in 2016. The pursuit of the recovery of the Eurozone, as well as the acceleration of worldwide growth, would allow for a significant improvement in foreign trade and a high internal private demand. Growth could reach 2.0% again in 2018 and is estimated at around 1.7% in the following years. 

2.6% (and 97.0%) 

The French public deficit is now below the 3% threshold, thanks to a more important growth than predicted. By 2022, the State is hoping for a positive public balance (+0.3%): the long-lasting return under the 3% deficit should normally put an end to the excessive deficit procedure unclenched by the European institutions 10 years ago. 
The public debt, which reached 97.0% of the GDP in 2017, after 96.6% in 2016, should progressively decrease and reach 89.2% of the GDP in 2022.

0.5 GDP point 

This is the reduction of the structural deficit in 2017 (reaching 2.0%). While this reduction currently meets the European budget’s requirements, it will not be the case in the following years of the presidential term. Indeed, the structural adjustment is projected between 0.1 and 0.4 GDP point, an effort inferior to the one requested by the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union.