Trying to set a course despite the uncertainties. The annual exercise of defining a budgetary trajectory turns into a puzzle this year for Bercy, while the health crisis linked to Covid-19 seems to be regaining strength. The finance bill (PLF) for 2021, which will include the 100 billion euro stimulus plan announced on September 3, was to be sent for opinion, Wednesday, September 16 in the evening, to the High Council of Public Finance, before a presentation of the text on September 28 in the Council of Ministers.
The government has slightly revised upwards its activity forecast for this year: the recession should finally reach – 10%, against – 11% expected in July, before a rebound in gross domestic product (GDP) of 8% in 2021 This objective remains more pessimistic than those of INSEE (- 9%) and the Banque de France (- 8.7%). “Consumption and industrial production rebounded between June and August, but health trends are no longer as favorable as in July, and the resurgence of the epidemic could weigh on the gradual normalization of consumer and business behavior. “, we warn in Bercy, where we also point the “Increased international uncertainties” linked in particular to Brexit and the American election.
Consequence: the number of net jobs destroyed should peak at 800,000 this year (against 300,000 job creations in 2019) before a rebound to 320,000 creations in 2021. For Bercy, most of the job destruction has already had held in the first semester (715,000). The public deficit, for its part, should plunge to – 10.2% (against – 11.4% expected previously) and be absorbed more slowly than expected (- 6.7% in 2021) because of the spending of the stimulus plan which will weigh directly on public finances.
It should be noted that the cost of cancellation and deferral of charges granted to companies has been sharply revised upwards: it goes from 3.9 to 11 billion euros this year, taking into account companies that cannot pay or will be granted a further deferral due to their state of health. Public debt is expected to reach 117.5% of GDP this year, before falling slightly, to 116.2% in 2021.
“Not new” measures
No question for the executive, however, to give up. These forecasts “Include the France Relance plan, which will stimulate growth by 1.5 points from 2021”, praises Bercy. However, since the presentation of the plan, which combines tax cuts for companies, vast investment programs and some more targeted measures, the question of its effectiveness on the economic rebound hoped for in the short term has been raised.
You have 56.23% of this article to read. The rest is for subscribers only.