The amending finance bill presented on Thursday confirms the objective of a deficit of 3.1% of GDP this year. The executive saves less than expected, but compensates with dynamic tax revenues and lower debt costs. The High Council of Public Finances considers this objective “plausible”.

Bercy continues to forecast growth of + 1.4% for 2019.

A priori, nothing has changed on the horizon. The amending finance bill (PLFR) for 2019, which will be presented this Thursday by the government, resumes the forecasts put forward for several months, with a public deficit at 3.1% of GDP. A figure judged « plausible » according to the opinion of the High Council of Public Finances, of which “Les Echos” have obtained a copy. No new tax measure is planned in this PLFR, the sign according to Bercy “Sound management based on sincere assumptions”.

If the facade is the same, the foundations have changed a bit. Thus, the text presented shows an amount of savings less than expected (500 million less and few cancellations of credits), offset by higher tax revenues and low interest rates which significantly reduce the debt bill. .

“Achievable” growth

In detail, Bercy continues to expect growth of + 1.4% of GDP for this year. A trend above consensus, while the IMF revised down its forecast for France on Wednesday to + 1.2%. The High Council considers that this government forecast nevertheless remains “Attainable” even if » with growth of at least 0.5%.

If the activity is resisting as best it can, it was on the other hand necessary to face new expenditure of the State. Thus Bercy had to record 2.6 billion euros in new loans during the year, according to our information: 800 million for the activity bonus, 600 million caused by the postponement of the reform of the contemporaneization of APL , 300 million due to the success of the automobile conversion bonus and finally an additional 100 million for allowances for asylum seekers.

In addition, the High Council warns of “The existence of a risk of overrun on the expenditure of local authorities, mainly investment”. Over the first nine months of the year, they increased at a rate of 1.9%, while the executive expects + 1.5% over the year.

Few credit cancellations

Faced with this, the government has not forced the effort on savings. In the spring, he pledged to cut spending by 1.5 billion euros. Finally, the ambition is reduced to a billion. To achieve this, the government avoided too much recourse to the more politically painful cancellations of credits, and took advantage above all of the leeway allowed by the budget’s precautionary reserve.

It is true that the executive had other assets up its sleeve to meet its budgetary objectives at all costs. Thus, tax revenues turn out to be better than what was anticipated last September (where the forecasts had already been revised upwards): the amount should be higher by 1.1 billion “Due to a modest adjustment for certain compulsory levies (income tax, transfer duties, tax on real estate wealth)”, according to the High Council. Budget wise men also evoke “Higher trends” to that anticipated for VAT receipts.

Generous interest rate

The very low level of interest rates – even though they briefly returned to positive territory for the first time since July on Wednesday – also continues to greatly help the executive to stay on its budgetary course. Thanks to this, the latter hopes 1.6 billion euros in savings on the debt load. The High Council has also calculated that if the structural effort on the decrease in spending represents 0.3 point of GDP in 2019, 0.2 point could be explained by the drop in the interest charge. Suffice to say that Emmanuel Macron had some reasons to congratulate Mario Draghi on his departure from the presidency of the ECB.