Bercy revises slightly downward its deficit forecast for 2022

Posted Nov 2, 2022, 6:11 a.m.Updated Nov 2, 2022, 8:50 a.m.

In these difficult times, this is a good surprise. The new draft amending budget for 2022 – the second of the year – which will be presented to the Council of Ministers this Wednesday morning, will record a slight reduction in the public deficit. This is now expected at 4.9% of GDP, instead of the 5% targeted so far, countering criticism from the High Council of Public Finances which deemed Bercy’s forecast “a little underestimated”.

In the current context of high inflation and growth in activity, tax receipts continue to be more dynamic than anticipated. The government estimates that they could ultimately be 4.2 billion euros higher than it expected in the summer, half coming from corporation tax, the other from income tax. . This should make it possible to finance new measures to offset the effects of soaring energy prices and inflation.

Energy check

On the substance, the text which must be debated in the National Assembly from November 7, then in the Senate the following week, is part of a “spirit of continuity” with the law on purchasing power adopted in the month of last August according to Bercy, and confirms the opening of new credits up to 2.4 billion euros.

In detail, 1.5 billion euros is planned to finance the “exceptional energy check”, in the amount of 100 euros or 200 euros depending on income, which must be paid to 12 million households by the end of the year.

In addition, 440 million euros are added to cover the cost of the extension of the discount of 30 euro cents on fuel prices until November 15, announced in mid-October by the executive to compensate for increases in prices related to strikes in refineries.

Finally, an allocation of 275 million euros is released to help universities bear the additional costs linked to the explosion of their energy bills and 200 million will be used to finance the fuel used by the Ministry of the Armed Forces.

Inflation expected at 5.3%

In total, openings of gross credits for an amount of 7.5 billion euros and cancellations up to 5 billion, we specify in Bercy. Thus, an extension of 2 billion euros should be allocated to France Skills, the regulatory body for vocational training, in order to take into account the strong dynamics of learning.

The executive, on the other hand, decided to cancel 2 billion euros of credits provided for under state-guaranteed loans due to lower claims than expected. “This ‘anti-inflation extension’, we are financing it while reducing our deficit”, underlined in a press release the Minister of Action and Public Accounts, Gabriel Attal.

With regard to growth or inflation, the executive, on the other hand, left its forecasts unchanged in its new draft budget. The rise in prices is still expected at 5.3% on average over the year, despite the surge observed in October when it reached 6.2% over one year. Similarly, after the 0.2% increase in GDP during the summer, the objective of growth of 2.7% for the year as a whole is confirmed. “In concrete terms, this means that economic activity should grow by 0.2% in the fourth quarter given the growth overhang. It is achievable in view of the economic surveys, ”we assure Bercy.

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