Report
France 2022 budget: In search of the optimal deficit
France’s 2022 finance bill attempts to overcome the dual challenge of running a smaller fiscal deficit than in 2021 while maintaining a relatively accommodating fiscal policy. While the underlying assumptions of the budget in terms of growth and the underlying risks seems credible, a few points nevertheless appear less clear at this stage . This is the case of the absence from the draft budget of the “France 2030” investment plan, the skills plan and the “ engagement plan ” to tackle youth unemployment . A deficit of 4.8% of GDP in 2022 remains acceptable in the current environment and in line with the exceptional situation facing European economies . However, the real challenge will be to reduce the structural deficit from 2023 against a regulatory and economic backdrop (monetary policy tightening) that will take shape in 2022 and could be markedly less favourable than today.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Jesus Castillo
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