France Aims for 5-5.5% Deficit in 2025, Plans €50B Savings, No Tax Hikes for Middle Class

Jan 6, 2025, 07:28 AM

The French government aims to reduce its public deficit to between 5% and 5.5% of GDP by 2025, according to Finance Minister Lombard and Budget Minister Amélie de Montchalin. Lombard indicated that reducing the deficit to 5% by 2025 would be too ambitious, emphasizing that the budget situation is serious and that the deficit will decrease progressively from an expected 6.1% in 2024. The government targets bringing the deficit within 3% of GDP by 2029. To achieve these fiscal goals, it plans to secure €50 billion in cost savings and introduce a special tax on the largest companies, while avoiding tax increases for households and the middle class. However, higher-income individuals and businesses may face additional taxes. De Montchalin expressed confidence in securing a parliamentary majority to pass the budget, as business leaders express concern over the absence of an approved budget.