On Wednesday 21st September 2022, the High Council of Public Finance adopted an opinion concerning the budget bill and the social security financing bill for the year 2023.
The High Council judges that the Government's forecasts for growth (+2.7%), inflation (+5.3%) and wage bill growth (+8.6% in the non-agricultural market sectors) for 2022 are credible. It considers that the general government balance forecast (-5.0 points of GDP) is prudent, given the dynamism of tax and social contribution receipts until July.
For 2023, the High Council considers that the Government's growth forecast (+1.0%), which is higher than that of a majority of forecasters, is, due to several fragile assumptions, somewhat high. The forecasts for inflation (+4.2%) and wage bill growth in the non-agricultural market sectors (+5.0%) are plausible.
The High Council considers that the general government balance for 2023, while being affected by the sizeable uncertainty surrounding macroeconomic developments and in particular energy prices, could be worse than expected due to the underestimation of some expenditures.
The High Council notes that the planned public deficit for 2023 would not decrease from 2022 and that the structural adjustment would be limited to 0.2 points of potential GDP. Once the impact of the withdrawal of exceptional expenditures in response to the health and energy crisis is neutralized, public spending is expected to increase in volume terms (+0.7%). This is due in particular to a €24 billion increase in the appropriations of the ministries (employment, interior, justice, defense in particular) and to an increase of health insurance expenditure (Ondam) - excluding expenditure linked to the health crisis - that is still higher than before the health crisis.
Overall, although based on optimistic assumptions, the Government forecasts for 2023 a mere stability of the actual public deficit, a limited improvement of the structural balance and a quasi-stability of the debt ratio. The consolidation of public finances thus looks slow and very uncertain in 2023.
The medium-term sustainability of public finances therefore continues to call for the utmost vigilance. The High Council points out that the return to debt levels guaranteeing France sufficient fiscal space is required to be able to cope with macroeconomic or financial shocks and public investment needs. It implies a collective effort to contain public expenditure and improve its efficiency.