France’s public debt soars to €3.3 trillion, reaching 113.7% of GDP by Q3 2024
PARIS – France added another 71.7 billion euros to its public debt mountain, spiking to €3.3 trillion by the end of the third quarter of 2024, or 113.7% of gross domestic product (GDP), according to figures unveiled on Friday by the French National Institute for Statistics and Economic Studies (INSEE), state media reported.
INSEE’s report follows Moody’s latest analysis, released on Wednesday, which indicated that the total debt of the state, local authorities, and social security is expected to keep rising for the next five years at least. In other words, it is only in 2030 that the French debt may be able to begin its descent.
Such figures represent another challenge to new Prime Minister Francois Bayrou as he works on naming a government. On Thursday, he expressed hope to appoint a government to lead the country out of its political deadlock by the weekend, or by Christmas at the latest.
Last Friday, credit ratings agency Moody’s downgraded France’s rating to “Aa3” from “Aa2” with a stable outlook for future moves and put it in line with those from rival agencies Standard & Poor’s and Fitch. This came hours after President Emmanuel Macron named Bayrou as the new PM.
Earlier this month, the far-right and left-wing united to oust Bayrou’s predecessor, Michel Barnier, from office, as they opposed his 60-billion-euro austerity plan, which he had hoped would curb France’s spiralling fiscal deficit.
“Political fragmentation is more likely to impede meaningful fiscal consolidation” in France, the American ratings agency said in its statement, adding that “there is now very low probability that the next government will sustainably reduce the size of fiscal deficits beyond next year.”
The new French PM describes this financial and political situation as a “Himalaya” of challenges haunting the country, amid rising political fragmentation that has plunged France into unprecedented turmoil.
