The public debt continues to rise. According to the Insee, it has increased in the first quarter to reach 99.6% of the GDP. Either 2358,9 billion euro (+43,6 billion compared to the previous quarter). She had reached 98.4 per cent of GDP in the last quarter of 2018.
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The State has largely contributed to this increase with a debt increase of € 42 billion. The contribution of the central government agencies (Odac) increases of $ 1.6 billion, “almost exclusively as a result of the SNCF Network,” said the Insee. The local public authorities (Lufa) have also seen their contribution to the debt increase by 1.2 billion, “reflecting the debt of the regions (+0.5 billion) and of the Société du Grand Paris (+$2.2 billion),” notes the institute.
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conversely, the common désendettent to the tune of $ 1.0 billion and departments to € 0.4 billion. The contribution of social security funds (Asso) to the debt also decreases (-1,2 billion), including of the Acoss and Cnaf.
Skid
To 99.6% of GDP, the public debt was flirting with the symbolic threshold of 100%. And the situation will hardly improve by the end of the year, as the government table on a debt of 98.9% of the GDP in 2019. By 2022, it should be reduced to 96.8% of GDP, according to the forecasts sent to you in April in Brussels. Bercy has therefore reviewed its ambitions downward, since it provides more than a drop of 1.6 percentage points of GDP over the whole of the quinquennium, in place of the five points of GDP initially announced.
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The Court of Auditors has been highly critical of this situation in a report published in the beginning of the week. She is concerned about the slippage in public accounts due to, in particular, measures in favour of the purchasing power, announced in the midst of a crisis of the “yellow vests”. The sages of the rue Cambon fear that the situation does not deteriorate even with the tax cuts of 5 billion euros announced by Emmanuel Macron in April and that is not yet taken into account in the calculations of Bercy. And what’s more, the growth has been revised downwards to 1.4% this year.
The beneficial effect of low interest rates
The IMF is also worried about recently the level of public debt in france, which he considers “too high”. According to him, “the external risks have increased, and structural problems persist”. For this reason, a “sustained effort must be made”.
In the meantime, the State can at least rejoice in one thing: the very low rate of interest. These will allow them to reduce the interest costs to repay. On the 18th of June, the rate on ten-year bond of France is spent for the first time in negative territory.
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