Key facts
- France's budget deficit could reach nearly 7% of GDP by 2030 if spending is not curbed.
- Public debt is projected to exceed 130% of GDP by the end of the decade.
- Annual interest payments on public debt are forecast to reach €124 billion by 2030.
- Stabilizing the debt-to-GDP ratio requires cumulative budget tightening of €126 billion by 2032.
- The report suggests targeted reforms and reconsideration of automatic inflation indexation for benefits and pensions.
France faces a significant risk of deteriorating public finances through the end of the decade unless immediate action is taken to curb spending, according to an independent report commissioned by the government. The projections indicate that the budget deficit could widen from 5.0% of gross domestic product in 2026 to nearly 7% by 2030 if no corrective measures are implemented. Concurrently, public debt is expected to increase from 118% of GDP in 2026 to over 130% by 2030.
The report, prepared by economists Xavier Jaravel, Xavier Ragot, Jean-Luc Tavernier, and Natacha Valla, was commissioned by Finance Minister Roland Lescure. It aims to inform a potentially contentious debate over public finances as parliament begins examining the 2027 budget in October, preceding next year's presidential election.
These findings emerge amid growing apprehension that France's substantial public debt burden of €3.5 trillion ($4.0 trillion) could escalate as government borrowing costs surpass economic growth. The report specifically warned that debt-servicing costs will become a heavier burden as bonds issued during a period of low interest rates are refinanced at higher rates. Annual interest payments are forecast to climb to €124 billion by 2030, up from €78 billion this year.
To stabilize the debt-to-GDP ratio within the next five-year presidential term, the economists estimated that France would need cumulative budget tightening measures totaling €126 billion by 2032. The report cautioned that delaying action until after the 2027 election would necessitate larger adjustments later and could potentially erode investor confidence.
Instead of advocating for broad spending cuts, the economists recommended targeted structural reforms. They specifically urged policymakers to reconsider the automatic inflation indexation applied to certain welfare benefits and pensions.