| Haut Conseil des Finances Publiques

The High Council of Public Finance shall assess the realism of the Government’s macroeconomic forecasts and ensure the consistency of the return trajectory to balanced public finances with France’s European commitments.

Independent body from the Government and the Parliament, it has been attached to the Cour des comptes and is chaired by its First President.

Quelle stratégie de finances publiques pour la France et l'Europe d'ici à 2030 ?

Retour sur la conférence organisée par le HCFP et Sciences Po le 11 mai 2023 à l'occasion des 10 ans du HCFP

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Photo des intervenants de la conférence du 11 mai 2023 pour les 10 ans du HCFP

Conference jointly organized by HCFP and Sciences Po on May 11, 2023, Paris

Public finance strategies for France and Europe by 2030

HCFP’s opinion on the draft Ministry of Justice’s orientation and programming bill (PLPJ) for 2023-2027

(1/2) The budgetary appropriations for the Justice mission in the PLPJ are in line with those voted in the budget law for 2023 and are identical to those in the PLPFP for the years 2024 and 2025. According to the Government, this would also be the case for 2026 and 2027, which the High Council cannot check.

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The graph shows the budgetary appropriations for the Justice mission from 2012 to 2027. These appropriations, which were less than €6 billion (in current euros) in 2012, should reach €10.7 billion in 2027.

HCFP’s opinion on the draft Ministry of Justice’s orientation and programming bill (PLPJ) for 2023-2027

(2/2) In order to respect the trajectory of the Public finance programming bill, State expenditure not covered by programming laws should fall in volume by 1.4% per year on average between 2023 and 2027. It means a greater decrease than in the past, thus implying a significant effort to control expenditure.

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The graph shows that the change in volume of State spending under programming laws (PLPJ, PLPM, LPR, LOPMI) is higher than that of State spending not covered by programming laws (excepted in 2020 and 2021). These curves, which are relatively close between 2013 and 2019, are further apart between 2023 and 2027; expenditure not covered by programming laws will decrease in volume each year over the 2023-2027 period.

HCFP’s opinion on the 2023-2027 Stability Programme

(1/3) The High Council considers that the growth forecast (1.7% on average per year from 2025 to 2027) is high. It is based on favourable assumptions for potential growth (1.35% per year from 2023 to 2027) and for the output gap in 2022 (-1.1 percentage point of potential GDP).

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The graph shows France's annual real GDP growth, potential GDP growth and output gap from 2019 to 2027, as forecast in the 2023-2027 Stability Programme. GDP growth is forecast to average 1.0% in 2023, 1.6% in 2024, 1.7% in 2025 and 2026, and 1.8% in 2027. Potential growth is projected at 1.35% per year from 2023 to 2027. The output gap is estimated at -1.5 percentage points of potential GDP in 2023, -1.3 percentage points in 2024, -0.9 percentage points in 2025, -0.5 percentage points in 2026 and assumed to be zero in 2027.

HCFP’s opinion on the 2023-2027 Stability Programme

(2/3) The High Council notes that the Government has revised the public deficit and debt targets for 2027 to better take into account the necessity to reduce public debt, which the High Council has repeatedly emphasised.

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The graph shows the evolution of the general government balance and the public debt, in percentage points of GDP, from 2022 to 2027. The general government balance, estimated at -4.7 percentage points of GDP in 2022, is expected by the government to be -4.9 percentage points of GDP in 2023, -4.4 percentage points of GDP in 2024, -3.7 percentage points of GDP in 2025, -3.2 percentage points of GDP in 2026 and -2.7 percentage points of GDP in 2027. Public debt, estimated at 111.6 percentage points of GDP in 2022, is expected at 109.6 percentage points of GDP in 2023, 109.5 percentage points of GDP in 2024, 109.4 percentage points of GDP in 2025, 109.2 percentage points of GDP in 2026 and 108.3 percentage points of GDP in 2027.

HCFP’s opinion on the 2023-2027 Stability Programme

(3/3) The public finance trajectory calls for the implementation, over several years, of efforts to curb public spending on a greater scale than those implemented in the past, although their timing and concrete details are still vague.

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The graph shows the evolution of public spending, including emergency and stimulus measures, in volume from 2005 to 2027.

HCFP opinion on the budget settlement bill for 2022

(1/3) The general government balance stands at -4.7 percentage points of GDP in 2022. The public deficit is significantly higher than in 2018, due to the increase in the ratio of public expenditure to GDP.

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The chart compares the ratios of public revenues and public expenditure to GDP in 2018 and in 2022. Whereas the public revenues ratio to GDP remained unchanged (53.4 %), the public expenditure ratio increased from 55.6 to 58.1 percentage points of GDP between 2018 and 2022, which results in a an increase of the public deficit from 2.3 à 4.7 percentage points of GDP between 2018 and 2022.

HCFP opinion on the budget settlement bill for 2022

(2/3) The structural deficit is reduced by one percentage point of potential GDP in 2022, mainly due to an increase in compulsory levies that is significantly higher than activity (elasticity of CLs is much higher than 1). The effort to control spending is very limited and more than offset by new tax cuts.

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The chart presents the contributions to the one-percentage-points structural adjustment in 2022. The structural effort is slightly negative (-0.1 pps of potential GDP), the spending effort (0.2 pps of potential GDP) being more than offset by new tax cuts (-0.3 pps). The compulsory levies elasticity, much higher than 1, essentially explains the structural adjustment (+1.2 pps), the revenues other than compulsory levies contributing to -0.1 pps.

Opinion n°2023 - 5 Budget settlement bill 2022 (236)

(3/3) The public deficit recorded in 2022 (4.7 pps of GDP) is 4.5 percentage points higher than that forecast in the January 2018 programming law (0.3 pps). This difference is mainly attributable to the increase in the structural deficit, which is 2.6 percentage points higher than the forecast in the LPFP.

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The chart compares the general government balance (and its components) recorded in 2022 (-4.7 percentage points of GDP) and the general government balance forcast for 2022 in the LPFP of janvier 2018 (-0.3 pps). This 4.5 pps deterioration compared to the LPFP is due to the structural deficit increase (2.6 pps) and to the deterioration of the cyclical balance (1.8 pps).

HCFP’s opinion on the draft military programming bill

(1/3) The High Council notes that the absence of a public finance programming law (LPFP) does not allow it to fully exercise its mandate.

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quotation : « The High Council therefore calls for the rapid adoption of a credible and ambitious LPFP to provide a multi-annual anchor for public finance management ».

HCFP’s opinion on the draft military programming bill

(2/3) The trajectory of budgetary appropriations for the Defence mission is identical in the PLPM and in the draft LPFP for 2024 and 2025; according to the Governement, it is also the case for 2026 and 2027, although the HCFP cannot check it.

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The graph traces the history of budgetary appropriations provided for in the military programming laws from 2014 to 2030. These appropriations, which were less than €30 billion (in current euros) in 2014, should almost reach €69 billion in 2030. This curve shows the growing effort in favour of the Defence mission.

HCFP’s opinion on the draft military programming bill

(3/3) In order to respect the trajectory of the PLPFP, State expenditure not covered by a programming law should fall in volume by 1.4% per year on average between 2023 and 2027. It means a greater decrease than in the past, thus implying a major effort to control expenditure.

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The graph shows that between 2013 and 2027, the change in volume of State spending under programming laws (PLPM, LPR, LOPMI) is higher than that of State spending not covered by a programming law (excepted in 2020 and 2021). These curves, which are relatively close between 2013 and 2019, are further apart between 2023 and 2027; expenditure not covered by a programming law will decrease (in volume) each year over the 2023-2027 period.