Divine surprise to the government: the public deficit, which earned us the wrath of Brussels, would, in 2014, much less than expected. 4% of GDP instead of the 4.4% expected, according to INSEE. So finally spring to a level slightly below that of 2013 (4.1%), while it was up 0.3 points. Good news due to control public expenditure
Major items that contributed to this moderation. “Intermediate consumption”, which fell for the first time since 2001 (-0.6%), the interest paid by the state, down 0.9 billion euros (due to low market rates, and even as debt increases to 95% of GDP), slower growth in social benefits ( in particular because of a sub-indexation of pensions) and the decrease in the contribution of France to Europe (-2.6 billion). But also, and especially, the collapse of public investment, particularly from local authorities (-5.2 billion).
Overall, this lower expenditure growth (+ 1.6% against 1.8% in 2013), allows to slightly reduce the deficit, even as revenues slow, too, significantly (+ 1.9% against 3.2% in 2013). Including taxes on income and wealth, which rose only 0.2%, against 4.9% in 2013. It is this small increase in revenues leads to limiting the deficit to 0 1 point only in 2014, against 0.7 in 2013.
This decline-even slightly the deficit, when the government expected a rise of it, give a bowl air to the executive. Indeed, the “on” to achieve the goal of 2.8% in 2017 (the new deadline recently granted by Brussels) is reduced accordingly. The target for 2015 has already been reduced “around 3.8%”, against 4.1% originally planned, said the Finance Minister Michel Sapin said in a statement.
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