French Public Deficit at 5.1% in 2025 Makes the 2026 Government Target More Easily Achievable

French general government deficit for 2025 stands at 5.1% of GDP, following 5.8% in 2024 and 5.4% in 2023 , marking an improvement for the second consecutive year. The general government deficit is thus better than the government's forecast (5.4%) and very close to our 5.2% expectations (see France has a Social Security Budget for 2026 ). Looking into the details, the improvement was mainly due to R evenues : Revenues rose by 3.9%, after +3.2% in 2024, with the compulsory tax rate at 43.6% of GDP, following 42.8% in 2024. New taxes – notably the “one-off levy on large corporations” represented +0.3 pp of GDP. Expenditure slowed down but still increased by 2.5% in current prices, following a 4.0% rise in 2024. Expenditure s increased to 57.2% of GDP after 57.0% in 2024 and 56.8% in 2023, which shows that there is virtually no effort on this side. Interest expenditure rose sharply (+0.2 pp to 2.2% of GDP).  The State and local government deficits decreased, whilst social security moved into deficit (see Table 1 ). Table 1: French public deficit by Administration (% GDP) % GDP 2023 2024 2025 General Government -5 . 4% -5 . 8% -5 . 1% State Deficit -5 . 4% -5 . 2% -4 . 3% Local A dministrations -0 . 4% -0 . 6% -0 . 5% Social Security Administrations 0 . 4% 0 . 0% -0 . 2% Source: Insee , Natixis CIB For 2026, the 5% target remains reachable despite the energy shock , and the government even aims to bring it slightly below 5% . We think the State and Local government deficits will continue to improve while the social security deficit is likely to worsen. General government debt in the Maastricht definition reached 115.6% of GDP by the end of 2025, after 112.6% at the end of 2024. The French public debt will continue to be on an up ward trend in the coming years i n a context of increasing debt interest expenditures and as the public deficit will remain above the level required for stabilizing debt (~3% of GDP, see Europe: A bumpy road to public debt stability? ).