The government still expects the French economy to grow in 2023 and is determined to contain the public deficit to 5% of gross domestic product (GDP) next year, Bruno Le Maire said on LCI on Monday. The Minister of the Economy also returned to the government’s promise to create a food check to compensate for the high inflation on food products.
economy French is resilient. This is a summary of what Bruno Le Maire said on LCI this Monday, September 12. Invited on the set of the channel, the Minister of the Economy maintained that “we will have positive growth in 2023”. “I want us to look at all the disaster scenarios, the reality is that in 2022, the French economy is resisting”
Bruno Le Maire also confirmed the objective of an equivalent public deficit to 5% of GDP next year while the government intends to bring it back into the European nails, i.e. below 3%, at the end of the five-year term, in 2027. On the projections of a “limited recession” made by the Governor of the Banque de France, the Minister of Economics is not of the same opinion. “I want us to look at all the disaster scenarios, the reality is that in 2022, the French economy is resisting,” he said.
It didn’t escape me that there was an energy crisis – and I deal with it morning, noon and evening, 7 days a week – but the fundamentals of the French economy are solid enough for us to get through this hard time. Bruno Lemaire
In its latest forecasts, published at the end of July, the government anticipated GDP growth of 1.4% next year.
INSEE warned last week that it now anticipates a sharper-than-expected slowdown in activity in the second half of the year, which will not give the French economy much momentum to start 2023.
According to INSEE forecasts, the growth overhang for next year, i.e. the change in GDP if activity stagnated completely during the year, is now estimated at only 0.2 % for 2023.
The Banque de France is due to publish its new macroeconomic forecasts for the 2022-2024 period on Thursday, but its governor, François Villeroy de Galhau, did not rule out the risk of recession in 2023 last Friday, citing “at least” a slowdown in the economy. French economy next year.
Removal of the CVAE
As the presentation of the finance bill (PLF) for 2023 approaches, the Minister of the Economy has specified that the abolition of the contribution on the added value of companies (CVAE), announced by Elisabeth Borne during her general policy speech in early July, would take place over two years – 2023 and 2024 – and not in one block next year.
We will abolish this production tax in two stages, in 2023 and 2024″, explained Bruno Le Maire, stressing that this two-stage trajectory would be included in the finance bill (PLF) for 2023, which must be presented to the end of the month.
ud83dudd34ud83dudde3ufe0f “Yes, we will abolish the Contribution on added value (CVAE): production taxes are too heavy in France. But we will abolish it twice – in 2023 and in 2024 – by concern for the balance of our public finances”, announces @BrunoLeMaire at @agindre. pic.twitter.com/qyoCNzKchN
— LCI (@LCI) September 12, 2022
No more food checks
Among the other subjects addressed by the minister, the abandonment of the system promised by the executive around a food check. Bruno Le Maire acknowledged that such a measure, targeted and which would benefit everyone, was too complicated to put in place. And to evoke the replacement of this aid by a simpler measure, that of the inflation allowance of 100 €.
Regarding the “unprecedented rise” in ECB rates, he also said that it was not “a surprise” and that the government had anticipated this increase, which “fits perfectly into the strategy that is ours”, he specifies
On the expenditure side, the draft budget will notably formalize the extension in 2023 of the “tariff shield” on energy prices in an adapted and attenuated form.
“We will maintain a tariff shield for all our compatriots without exception”, recalled Bruno Le Maire, specifying however that the burden of the rise in energy prices could not only rest on the state budget.
“Our compatriots must absorb a small part of this increase,” he explained.
“It will be a small part, it will be a contained, reasonable increase”, added Bruno Le Maire, adding that the government “continue (a) with the energy check to support the most modest, in a more targeted way”.