Bercy bases the 2027 budget on a warning of further rising public debt

Paris – 17/07/2026: The French government is using a newly published report by four independent economists as a basis for preparing the 2027 budget. The document, submitted on 15 July, outlines a significantly deteriorated outlook for public finances through 2030 under unchanged policies. Bercy intends to use it to set the framework for parliamentary disputes over spending cuts, revenues and reforms.

The experts Xavier Jaravel, Xavier Ragot, Jean-Luc Tavernier and Natacha Valla were commissioned in May by Economy Minister Roland Lescure and the minister responsible for public finances, David Amiel. With support from the Finance Inspectorate, they examined medium-term spending dynamics and possible paths to consolidation. Their report is also intended to influence preparations for the 2027 Finance Act and the public debate ahead of the next presidential election.

Without new measures, the public deficit would rise under this projection from 5.9 percent of gross domestic product in 2027 to nearly 7 percent in 2030. Public debt would consequently increase from 118 percent of gross domestic product in 2026 to more than 130 percent in 2030. Debt servicing would be particularly burdensome: annual interest expenditure could rise by around EUR 10 billion per year between 2027 and 2030.

The economists recommend stabilizing the debt level no later than before the end of the next five-year term. They do not advocate a purely technical policy of cuts, but rather a combination of limited additional revenues, greater growth potential and tighter control of spending. Given the already high level of taxation, however, the focus should be on making public spending more efficient, especially in the social sector.

Specifically, the mission recommends targeted structural reforms rather than across-the-board cuts, as well as a review of automatic indexation mechanisms. It also calls on the government to systematically publish a medium-term unchanged-policy projection in its economic, social and financial report in the future. This would make transparent the costs arising from rules already in force and spending decisions already made before new policy initiatives are added.

The report comes at a time of growing budgetary pressure. At the beginning of July, the Committee for Monitoring Public Finances identified additional spending risks of around EUR 3 billion. The government also lowered its growth forecast for 2026 from 0.9 to 0.7 percent. A new deficit forecast is to be presented in September together with the draft 2027 budget.

The initial spending plan for 2027 also points to tough distributional conflicts. According to guidance submitted to parliament, ministerial spending excluding defense and interest costs is to grow by only 0.4 percent. Higher funding is planned primarily for defense, domestic security, justice, education and energy policy. For numerous other ministries, this effectively means stagnation or cuts before parliament decides on the budget in the autumn.