The projected state budget deficit is worse than expected

France’s financial situation is not improving. The state’s budget deficit “will be 173.3 billion euros for 2023”, or 2 billion more than planned in the final-management finance law, according to an announcement by Economy Minister Bruno Le Maire on Wednesday. In the Council of Ministers.

Introduced on October 31, the End-of-Management Finance Law (LFG), a new series of finance laws, foresees a deficit of 171.4 billion euros for 2023.

VAT revenue declined

Tax revenues were ultimately worse than expected: “net revenues from the general budget are 7.8 billion euros lower than forecast” by the LFG, the Council of Ministers report clarifies. The net corporate tax yield was “4.4 billion euros lower than forecast, due to lower-than-expected December advance payments and slower pre-tax profits”.

In addition, VAT “is 1.4 billion euros lower than forecast, and income tax presents a loss of 1.4 billion euros than forecast, due to lower withholding tax rates than expected from the summer 2023 announcements”, according to the government.

“Deficit control efforts” will continue

Expenditure “is 6.2 billion euros lower than the planned level in the LFG” partly attributed to “less implementation of credits from ministries (-3.8 billion euros) and less mobility of levies on revenues for benefits (-1.3 billion euros). Less safety net against energy prices.” of local authorities due to recourse,” according to Govt.

“Efforts to control the state’s budget deficit will be continued during 2024,” says the executive. The final budgetary balance, however, will be stated only when presenting the bills related to operating results and approving the accounts.