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French public debt soared to 115.7% of GDP in 2020, the public deficit to 9.2%

You have to go back to 1949 to see such a figure. The French public deficit in 2020 widened to 9.2% of gross domestic product (GDP) while the public debt soared to 115.7% of GDP. These figures are the result of an unprecedented health and economic crisis, Insee unveiled on Friday March 25.

The debt thus reached 2,650.1 billion euros and the deficit 211.5 billion euros, even if the drift in public finances is a little less important than what the government expected, which was counting on a deficit. of 11.3% and a debt of about 120%. In 2019, before the crisis, the debt stood at 97.6% of GDP and the deficit at 3.1%.

But the Covid-19 pandemic has plunged the French economy, with a recession of 8.2% in 2020, and pushed the government to massively support the economy to avoid the bankruptcies of companies, deprived of activity by the health restrictions, and job cuts.

Public administration expenditure (State, communities and Social Security) thus jumped 5.5%, or +73.6 billion euros, driven in particular by the increase in social benefits, salaries in the hospital sector and aid unlocked for businesses. At the same time, the decline in activity widened the level of revenue, which fell by 5%, or -63.1 billion euros, due to lower income from taxes and social contributions.

“The increase in expenditure and the contraction in revenue are more pronounced than in 2009”, at the time of the financial crisis, underlines INSEE. “The revenues had then decreased by 3% and the expenses had increased by 4.1%” for a deficit of 7.2%, added the National Institute of Statistics.

For this year, the government plans at this stage to reduce the public deficit to 8.5% of GDP, while the debt is expected to continue to increase to over 122%.

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