The French public deficit widened to 9.2% of the gross domestic product (GDP) in 2020, while public debt soared to 115.7% of GDP, revealed Insee this Friday.
The deterioration of public finances is slightly less severe than the government expected, as it was anticipating a deficit of 11.3% and a debt of around 120%. For 2021, the government currently plans to reduce the public deficit to 8.5% of GDP, while debt is expected to continue rising to exceed 122%. These figures result from an unprecedented health and economic crisis. The last time such figures were recorded was in 1949.
The debt thus reached 2,650.1 billion euros, and the deficit 211.5 billion euros.
In 2019, before the crisis, debt stood at 97.6% of GDP and the deficit at 3.1%. But the Covid-19 pandemic plunged the French economy into a recession of 8.2% in 2020 and prompted the government to massively support the economy.
The expenditures of public administrations (State, local authorities, and Social Security) jumped by 5.5%, equivalent to an additional 73.6 billion euros, driven notably by the increase in social benefits, salaries in the hospital sector, and aid released for businesses. Meanwhile, the decline in activity deepened the income level, which fell by 5% (-63.1 billion euros), due to lower revenues from taxes and social contributions.
