(Bloomberg) -- France’s government confirmed it expects the budget deficit to rise to 6.1% of economic output in 2024 as it canceled some spending plans to mitigate part of the huge impact from unexpectedly weak tax revenues.
The finance ministry reiterated the forecast in an end-of-year budget bill presented to cabinet on Wednesday that will contain the central state’s spending at around €6 billion ($6.4 billion) less than initially planned a year ago. The reduction in outlays comes in part from canceling credits across ministries that the previous government put on hold this summer when public finances deteriorated.
France has been forced into emergency measures in 2024 to pare back spending after poor tax receipts left a gaping hole in public finances. The initial 2024 budget had targeted a deficit at 4.4% of economic output.
The bill presented to cabinet on Wednesday also provides for €4.2 billion of unplanned spending to support Ukraine and France’s overseas territory New Caledonia. It also covers the costs of holding snap elections and paying bonuses for security forces working overtime during the Olympic Games.
Lawmakers will begin discussing the bill later this month, separately from the 2025 budget. Without a majority in the National Assembly, the government will likely have to resort to using a provision in the constitution to adopt the end-of-year budget without a vote.
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