French Finance Minister Roland Lescure stated that the government can still achieve its goal of reducing the deficit to 5% of economic output in 2026, even as the economic situation has worsened. This commitment comes ahead of a public finance committee meeting scheduled for June 30, which will discuss the additional savings needed to reach this target.
Lescure had previously reaffirmed the government's aim to bring the deficit down to 5% for the current year and further below 3% by 2029, even with the ongoing impact of the Iran conflict on the economy. While the upcoming budget is not expected to include tax increases for individuals or businesses, there have been discussions in the National Assembly and Senate regarding a potential exceptional tax on energy group TotalEnergies SE to help with deficit reduction efforts.
Separately, France's budget minister indicated in April that it was too early to set a more ambitious deficit reduction target, despite the deficit narrowing to 5.1% in 2025 from 5.8% the previous year. This cautious stance was attributed to one-off factors contributing to the 2025 reduction and the considerable uncertainty surrounding the macroeconomic effects of the Iran conflict in 2026.
A report from the Cour des Comptes highlighted France's growing public debt crisis, projecting it to exceed $3.6 trillion by 2026, with interest payments potentially reaching $77.4 billion. The audit office warned that current fiscal strategies are insufficient to address weaker growth and geopolitical tensions, underscoring the urgent need for a credible plan to reduce the deficit below 3% of GDP by 2029 to restore market confidence.
