Thursday, 20 January, 2022

Deficit, recession: what could further worsen Bercy forecasts


The High Council of Public Finances believes that the government’s budget forecasts, however gloomy, could still be too optimistic. Bercy hopes for a rapid return to normal in activity after the end of confinement and a “strong rebound” in 2021, which makes budget wise men tick. The level of public spending will reach a record in 2020, at 60.9% of GDP.

Bruno Le Maire and Gérald Darmanin presented their second post-coronavirus budget correction to the Council of Ministers on Wednesday.

Between gray not very light, and frankly very dark gray. The color chart summoned around the post-coronavirus public finance scenario is done in monochrome and leaves little room for short-term optimism. Thus, barely had the government presented on Wednesday an amending finance bill (PLFR) for 2020 indicating a recession and a public deficit never seen since 1945, than the High Council of Public Finance reported doubts about the too optimistic character of this scenario, however very dark.

No doubt the two institutions can at least come together on a finding made later Wednesday afternoon by Bruno Le Maire, in front of the deputies of the Finance Committee of the Assembly: “This is an economic upheaval unprecedented in our contemporary history” estimated the Minister of the Economy, counting “Over the years before emerging from the consequences of this crisis”.

The High Council of Public Finances believes that the government’s budget forecasts, however gloomy, could still be too optimistic. Bercy hopes for a rapid return to normal in activity after the end of confinement and a “strong rebound” in 2021, which makes budget wise men tick. The level of public spending will reach a record in 2020, at 60.9% of GDP.

Bruno Le Maire and Gérald Darmanin presented their second post-coronavirus budget correction to the Council of Ministers on Wednesday.

Between gray not very light, and frankly very dark gray. The color chart summoned around the post-coronavirus public finance scenario is done in monochrome and leaves little room for short-term optimism. Thus, barely had the government presented on Wednesday an amending finance bill (PLFR) for 2020 indicating a recession and a public deficit never seen since 1945, than the High Council of Public Finance reported doubts about the too optimistic character of this scenario, however very dark.

No doubt the two institutions can at least come together on a finding made later Wednesday afternoon by Bruno Le Maire, in front of the deputies of the Finance Committee of the Assembly: “This is an economic upheaval unprecedented in our contemporary history” estimated the Minister of the Economy, counting “Over the years before emerging from the consequences of this crisis”.