Doha:France is entering a crucial phase in preparing its 2027 budget, amidst mounting pressure on public finances. The government faces the complex task of balancing deficit reduction, supporting growth and investment, and preserving purchasing power.
According to Qatar News Agency, French public debt reached a record EUR 3.5955 trillion at the end of June, equivalent to 119 percent of GDP. Debt interest costs are expected to reach EUR 91.2 billion in 2027, narrowing public finance maneuverability. The state budget deficit stood at EUR 159.6 billion by the end of August, compared to EUR 157.5 billion the previous year.
The French government presented its draft 2027 budget on October 1, aiming to reduce the public deficit from 5.4 percent of GDP in 2026 to 5 percent in 2027, with a fiscal effort of EUR 54 billion including EUR 43 billion in new measures. However, growth forecasts for 2026 are low, at 0.5 percent, while the 2027 budget is based on 1 percent growth.
Dr. Kamil Al Sari, a political analyst, emphasized that France's 2027 budget is closely linked to the economy's ability to generate growth. He noted that political divisions complicate budget debates, with left-wing parties pushing for taxes on the wealthy, while right-wing parties focus on expenditure control. The fragmented parliament and absence of a clear majority add to these challenges.
Dr. Jamal Ben Kreid pointed out the complexity of the financial environment, stressing the importance of gradually restoring balance without weakening growth. He explained the need to distinguish between the budget deficit and public debt, highlighting that addressing the deficit in one year does not resolve the debt issue.
Ben Kreid also stressed careful targeting in fiscal adjustment to preserve growth and investment, suggesting rationalization in areas such as administrative structures and public policy efficiency. He warned against excessive staffing reductions that could deteriorate service quality.
Despite the challenges, the 2027 budget is viewed as a step in a multi-year process to restore order to French public finances, with the aim of reducing the deficit, stabilizing the debt-to-GDP ratio, and maintaining growth conditions. The sustainability of public finances depends on balancing fiscal discipline with growth, investment, and social cohesion.