France's public debt will approach 122% of GDP in 2027, a record

France’s public debt will approach 122 percent of gross domestic product (GDP) by 2027, according to government figures released this week. The French Ministry of Economy and Finance stated that public debt would rise to 119.3 percent of GDP in 2026 and 121.7 percent in 2027, marking the highest levels since 1995, based on data from the National Institute of Statistics and Economic Studies (Insee). The increase is described as mechanical, resulting from persistently high deficits. The ministry submitted draft budgets for 2027 to the High Council of Public Finance (HCFP), which must assess the “credibility” of the proposed economic paths. The government projects a public deficit of 5.1 percent of GDP in 2025, rising to 5.4 percent in 2026 before declining slightly to 5 percent in 2027. Finance Minister Roland Lescure called the 2027 target “ambitious” but “clearly achievable.” According to the ministry, the stabilization of the debt-to-GDP ratio can only occur once the public deficit is reduced to 3 percent of GDP, a goal set for 2029. France is currently the third-most indebted country in the eurozone after Greece and Italy. For comparison, Spain’s public debt fell below 100 percent of GDP in July, while Portugal’s was under 90 percent in 2025. Prime Minister Sébastien Lecornu outlined broad outlines for the 2027 budget, describing it as “offensive” with a major financial effort of 54 billion euros. However, he left sensitive measures, including those affecting retirees, for parliamentary decision-making. The government has refined its cost-saving proposals targeting retirees, planning to lower the tax exemption threshold for retirees from 4,439 euros to 3,000 euros annually. This change could generate an additional 1.4 billion euros in tax revenue, though officials acknowledge the political sensitivity of such measures. State and social security budgets will be presented at a cabinet meeting on October 1st before being examined by Parliament. The HCFP’s approval is mandatory. According to the ministry, public spending will decrease slightly to 56.9 percent of GDP in 2027, reflecting efforts to control expenditure across the state, social security, and local authorities. Net primary public spending, excluding debt servicing and unemployment-related costs, is projected to rise by 0.7 percent in 2027, slightly below the European Union’s recommended rate of 1.2 percent. In 2026, the increase is expected to be 1.4 percent, within the flexibility allowed by the EU. Tax collection rates are anticipated to reach 44.2 percent of GDP in 2027, up from 43.9 percent in 2026, due to reductions in tax loopholes and anti-fraud measures. Overall, there is no general increase in taxes.