Faced with downwardly revised growth and risks of spending slipping, the executive is launching a new savings plan, while admitting the difficulty of achieving the deficit objective.
The government was forced to announce 3 billion euros in additional savings in the current year’s budget to deal with the “risks” of excesses weighing on the accounts. This decision comes at a time when the trajectory of public finances is becoming more complicated, against a backdrop of downwardly revised growth and spending under pressure.
A risk of slippage of 5 billion euros
“Today we have a risk of slippage in public spending of 5 billion: 3 billion on the State and Social Security, measures will have to be taken, and 2 billion euros on local authorities”, detailed the Minister of Public Accounts David Amiel at the end of the public finance alert committee, meeting in Bercy in the presence of Prime Minister Sébastien Lecornu.
Of the new 3 billion euros in savings announced, 2 billion concern the State, “largely linked to the aid measures which have been deployed since last April”, and 1 billion targets Social Security, the minister said. These savings will be added to the 6 billion euros announced at the previous meeting of the alert committee last April.
In April, the executive implemented a plan to cut spending of 4 billion euros on the State and 2 billion euros in “the social sphere” – via a freeze on reductions in charges – to compensate for the cost of the conflict in the Middle East. The cost of said aid was estimated at 1.4 billion euros a little earlier in the week.
The details of future measures remain unclear at this stage. The Minister of Public Accounts simply indicated that these measures would be taken “during the year” via freezing or cancellation decrees or by means of management savings. David Amiel plans to “examine spending department by ministry” while preserving “essential” credits, in particular to respond to “urgent needs in terms of heat waves and crisis support”.
On the Social Security side, the dynamics of sick leave is singled out, with daily allowance expenditure having increased by 45% in seven years. A mandate was “entrusted to the social partners” of the commission in charge of this expenditure “to carry out 800 million euros in recovery measures”.
This new budgetary effort may not be enough to reach the deficit target of 5% of GDP for 2026. The Minister of the Economy, Roland Lescure, declared: “Obviously, our public deficit objective of 5% is difficult to achieve today. We will do everything to get as close as possible.” The deficit was 5.1% of GDP in 2025.
The situation is all the more tense as the government has lowered its growth forecast for 2026, downgrading it from 0.9% to 0.7%. This revision “takes into account a less favorable start to the year than anticipated linked in particular to the special law, as well as the international situation, in particular the conflict in the Middle East, even if the signals on inflation and consumption are more encouraging”, underlined Roland Lescure. Inflation rose to 2.4% in May year-on-year, before falling to 1.8% in June. GDP, for its part, fell by 0.1% in the first quarter.
A signal scrutinized by investors
At the start of the school year, the government will present a finance bill which will be an opportunity for “a total update of our estimates for 2026 and 2027”, described Roland Lescure. “If France did not manage to reduce, even marginally, its deficit this year, it would be a bad signal sent to investors,” warns Alexandre Stott, economist in charge of France at Goldman Sachs.
