France's Surprise: Public Deficit Narrower Than Expected

France's public sector budget deficit widened to 5.8% of GDP in 2024, surpassing 2023's 5.4% but performing better than the government's 6.0% estimate. Spending increases and lower tax income prompted multiple revisions. France targets a reduction to 5.4% this year and aims for EU's 3% ceiling by 2029.

Data released by France's statistics agency, INSEE, on Thursday revealed that the country's public sector budget deficit for 2024 widened to 5.8% of GDP. This figure, while larger than the previous year's 5.4%, managed to outperform the government's initial forecast of 6.0%.

Increased spending and shortfalls in tax revenue forced the government to adjust its deficit projections for 2024 multiple times. Despite these setbacks, France remains committed to curbing its deficit, setting an ambitious goal to decrease it to 5.4% of GDP this year as part of a broader strategy to meet the EU deficit ceiling of 3% by 2029.

Additionally, INSEE reported that the country's public debt rose to 113.0% of GDP in 2024, slightly above the government's forecast of 112.7% but a noticeable increase from 109.8% in 2023.

(With inputs from agencies.)