For his last hearing in front of the members, Bruno the Mayor stated that the whatever it costs does not prevent to anticipate the recovery of public finances.
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“This is probably our last hearing, at least for this five-year old.” It is a claim in the form of goodbye that delivered Bruno the Mayor before the National Assembly’s Finance Committee, Wednesday January 26th. At one month of the end of the parliamentary session, the Minister of the Economy and the Minister Delegate to the Public Accounts, Olivier Dussopt, were heard on the finances of the year 2021.
But the Mayor and Mr. Dussopt, eager to put their action in a neighboring five, also engaged in a projection exercise. Objective: To demonstrate that the “what-in-cost”, which has allowed the health crisis, does not prevent to anticipate the recovery of public accounts in Horizon 2027.
“With our majority, we give the French a strong, attractive economy that creates jobs”, welcomed the tenant of Bercy, stating having “the feeling of the accomplished duty”. “I do not dread Omicron’s effects on growth for 2022,” he said, recalling that gross domestic product (GDP) is still expected up 4% this year.
For 2021, growth should be around 6.7%, and the public deficit go up to “just over 7%”, nearly 1 no less than the estimate of the last amending budget presented at the autumn and voted in December (8.2%). And this, thanks to higher tax revenues of 20 billion euros in forecasts. But “it’s not a jackpot,” said the minister, reminding that these sums will be “allocated to debt reduction”.
Maintaining the public deficit forecast of 5% for 2022
In detail, the state deficit, although historically high, has improved significantly, at 171 billion euros, down 7 billion compared to 2020, but mostly 34 billion over at the previous forecast. Corporate taxes, in particular, reported 9.9 billion euros more than expected. “A real surprise, conceded Mr. Dussopt, who can be explained in part by a partial consideration of the decline in the corporate tax rate [he follows a decline trajectory since 2017, for reach 25% in 2022]. “
The strength of household consumption, it has made it possible to record 3.6 billion additional VAT revenues, while the return on income tax inflated by 1.6 billion. At the same time, the State has spent 9 billion less than expected in the fall, and the strong recovery of employment has boosted the receipts of social contributions.
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