On 2 October 2025, the macroeconomic and public finance forecasts contained in the draft budget (PLF) and social security financing bills (PLFSS) were submitted to the High Council. In accordance with the Organic Law, the High Council is issuing an opinion on these forecasts and information underlying them. However, as the High Council points out, the context in which this opinion is issued is very unusual, as the current political situation makes the future of these draft bills uncertain.
The High Council is issuing this opinion in a very specific and unprecedented context. After two years, 2023 and 2024, of deterioration in public finances that left France in a unique position in Europe, the current high level of political uncertainty and its fiscal and financial consequences pose significant risks to the path of public deficit reduction to which our country is committed, and which the High Council has reiterated in its opinions as being absolutely necessary.
On 2 October, the Government submitted to the High Council the macroeconomic and public finance forecasts contained in the draft budget (PLF) and social security financing bills (PLFSS). The resignation of the Government four days later and the major uncertainty caused by the political context make the future of these draft bills, and therefore the implementation of the measures underlying the forecasts, highly uncertain. In addition, changes to the numerous measures included in the submission to the High Council have already been discussed.
Nevertheless, in accordance with the Organic Law of August 1, 2001, on the budget laws, the High Council issues an opinion on the forecasts and information submitted to it.
The forecasts submitted to the High Council on October 2 project growth of 0.7% in 2025 (unchanged since April 2025) and 1.0% in 2026 (revised down by 0.2 points), and a public deficit of 5.4% in 2025 (unchanged) and 4.7% of GDP in 2026 (revised upward by 0.1%). The High Council notes that since submission of the draft budget, the outgoing Prime Minister mentioned that the deficit target for 2026 may move up to as high as 5% of GDP. This highlights the hypothetical nature of the scenario on which the High Council is called upon to give its opinion.
For 2025, the High Council considers the updated economic scenario to be realistic: the projections for growth, its composition, and inflation are realistic, while the projection for total wage bill is marginally too high. The projections for revenue, expenditure, and therefore the public balance are credible: they remain subject to uncertainty but are consistent with the available information and the economic scenario.
For 2026, the High Council considers that the economic scenario submitted to it is based on optimistic assumptions, combining significant fiscal consolidation with an acceleration in activity driven by a recovery in private demand. The GDP growth projection is only slightly higher than those of the organisations heard by the High Council and Consensus Forecasts (0.9%). However, compared with those forecasts, the draft budget submitted to the High Council assumes a more restrictive stance on public finances, which would therefore weigh more heavily on economic activity in the short term. To compensate for this, despite a less supportive international environment, the budget projection assumes a recovery in private domestic demand of a magnitude that seems optimistic given the prevailing climate of uncertainty, especially for business investment and, to a lesser extent, household demand. The inflation forecast (1.3%) is plausible, while the projection for the total wage bill (2.3%) is slightly high.
For public finances in 2026, the growth projection for tax, compulsory contributions and charges assuming no policy change appears broadly acceptable, with the optimistic nature of the economic scenario tempered by assumptions regarding the elasticity of revenue items that are sometimes a bit conservative. However, the High Council considers that the draft budget assessment of the yield from the new measures is fragile, even assuming that the numerous measures announced are adopted and implemented. The very moderate increase in public spending (+0.2% in volume) is a very ambitious target compared with the past, while certain spending items such as defence spending are expected to increase significantly. Substantial savings measures are in the draft budget, including suspending annual inflation indexation of public sector wages and benefits, an increase in household co-payments for health expenses, a reduction in non-defence appropriations, and tightening transfers to local authorities. Meeting the spending target would require the implementation of all the measures mentioned in the submission, but recent public announcements and discussions suggest that this is unlikely.
Overall, the public balance forecast for 2026 submitted to the High Council is undermined by an overly optimistic economic scenario and, above all, by the risk that the planned revenue and savings measures will not be fully implemented or will simply fail to materialize.
In 2025, the structural deficit would be reduced by 0.7 percentage points of GDP. The structural effort, which is the most common estimate of the contribution of budgetary measures to the evolution of the deficit, would amount to +0.8 percentage points of GDP in 2025 (approximately €24 billion), entirely due to revenue increases. After a sharp deterioration in the fiscal accounts in 2023 and 2024, 2025 would thus mark a very first step in reducing the deficit.
In 2026 – under the theoretical assumption of full implementation of the measures announced in the submission – the structural deficit would be reduced by 0.8 percentage points of GDP, and the structural effort would reach +1.0 percentage points of GDP (more than €30 billion, including approximately €17 billion in expenditure savings and nearly €14 billion in revenue hikes).
Last April, the High Council triggered the correction mechanism provided for in the Organic Law. If implemented, the corrective measures presented in the 2026 draft budget bill would enable a partial return to the structural trajectory of the public finance programming law (LPFP), but without being fully back on this trajectory within the maximum allowed period of two years. This commitment would be even less likely to be met with a smaller reduction in the deficit in 2026.
The High Council also notes that the projected change in net primary expenditure can be considered broadly compatible with our European commitments (medium-term fiscal-structural plan MTP) and in line with the recommendations made to France, but regrets the anticipated 0.2 point overshoot for 2025 and highlights the difficulty of meeting the target for 2026. It also notes the persistent gap between the LPFP and the MTP, which raises the question of a revision of the organic law.
In any case, the High Council stresses that it is essential to continue the effort to restore the fiscal accounts over the long term. Even in the scenario submitted, which the High Council again notes is hypothetical, the deficit would remain very high in 2026, with the primary deficit (excluding interest charges) still exceeding €70 billion. As a result, public debt would continue to grow at a worrying pace, rising from over 113% of GDP in 2024 to nearly 118% in 2026, while interest payments would increase by more than €13 billion in just two years to reach €74 billion. Strictly adhering to the MTP trajectory in order to significantly reduce the deficit, while ensuring that potential growth and priority investments are preserved, is therefore imperative to maintain control of public finances, restore room for manoeuvre, and preserve France's fiscal credibility and sovereignty.