Thursday, 20 January, 2022

Coronavirus: public accounts are deteriorating at high speed, without visibility on post-containment


The government hastily revised the forecasts of the amending finance bill presented on Wednesday. The fall of the GDP would reach 8% and the public deficit 9% of the GDP, unheard of since 1945. Within the opposition, Eric Woerth (LR) considers that the debate should focus less on these figures than on an exit plan containment for economic sectors.

Bercy had to review its budget forecasts, after the announcement by Emmanuel Macron of an extension of the confinement until May 11.

Officially, the government presents this Wednesday its second post-coronavirus budget correction for the year 2020. In reality, we could almost say that it is its third, as the figures used for this text are no longer large. something to do with those that had been announced last week. Thus the recession is now expected at 8% this year (it was 6% last Thursday), for a public deficit at 9% (7.6% five days ago) and a debt at 115% of GDP (112% previously), according to the announcements made Tuesday by Bruno Le Maire, the Minister of the Economy, and Gérald Darmanin, the Minister of Public Accounts.

To understand the magnitude of the shock, we must remember that the previous “records” in terms of public finances since the end of the Second World War dated from the financial crisis of 2009; but then the GDP had fallen “only” by 2.9% when the public deficit was “only” at 7.2%. The 2020 earthquake is of another magnitude, the magnitude of which we have probably not yet been able to measure. Gérald Darmanin agreed that the latest figures were “Indicative”. In a note published on Tuesday, Albéric de Montgolfier, the LR Budget rapporteur in the Senate, calculates that depending on the scenario of the recovery of the French economy, the recession can vary between -5% and -14% over the year 2020.

The government hastily revised the forecasts of the amending finance bill presented on Wednesday. The fall of the GDP would reach 8% and the public deficit 9% of the GDP, unheard of since 1945. Within the opposition, Eric Woerth (LR) considers that the debate should focus less on these figures than on an exit plan containment for economic sectors.

Bercy had to review its budget forecasts, after the announcement by Emmanuel Macron of an extension of the confinement until May 11.

Officially, the government presents this Wednesday its second post-coronavirus budget correction for the year 2020. In reality, we could almost say that it is its third, as the figures used for this text are no longer large. something to do with those that had been announced last week. Thus the recession is now expected at 8% this year (it was 6% last Thursday), for a public deficit at 9% (7.6% five days ago) and a debt at 115% of GDP (112% previously), according to the announcements made Tuesday by Bruno Le Maire, the Minister of the Economy, and Gérald Darmanin, the Minister of Public Accounts.

To understand the magnitude of the shock, we must remember that the previous “records” in terms of public finances since the end of the Second World War dated from the financial crisis of 2009; but then the GDP had fallen “only” by 2.9% when the public deficit was “only” at 7.2%. The 2020 earthquake is of another magnitude, the magnitude of which we have probably not yet been able to measure. Gérald Darmanin agreed that the latest figures were “Indicative”. In a note published on Tuesday, Albéric de Montgolfier, the LR Budget rapporteur in the Senate, calculates that depending on the scenario of the recovery of the French economy, the recession can vary between -5% and -14% over the year 2020.