The French government released the draft budget for 2027, confirming a 54 billion euros savings plan

China News Service, Paris, October 1 (Reporter Li Yang) The French government announced the draft budget for 2027 on the 1st local time, confirming a 54 billion euro spending saving plan in an effort to reduce the fiscal deficit.

French Economy and Finance Minister Lescure said that challenges such as slowing economic growth and rising inflation have had a significant impact on France's goal of reducing the public deficit. He said France's deficit would reach 5.4% of France's gross domestic product (GDP) in 2026, compared with an initial plan of 5%. He reiterated his intention to control France's deficit to 5% of GDP in 2027.

According to the draft budget disclosed by the French media, targeted tax measures will be adopted in 2027. Value-added tax and income tax will increase compared with 2026, but corporate tax revenue will decrease compared with 2026; the net tax revenue in the 2027 budget will increase by 18 billion euros compared with 2026.

In addition, the draft budget also involves content related to controlling the social security deficit, which may affect the salaries of public employees. The French public sector held strikes and demonstrations on the 29th of last month to oppose austerity policies. Students in many places in France also held protests this week, believing that "lack of resources" has led to overcrowded classrooms, dilapidated buildings, teacher shortages and other problems. Protests in some places have evolved into conflicts between protesters and police.

France's High Council of Public Finances, as a fiscal regulator, stated on the draft budget on the 1st that in view of the "worrying" public finance situation, the deficit reduction target proposed in the 2027 draft budget is a "minimum" necessary measure. The agency also called for measures to stabilize France's debt.

The 2027 budget draft will next be submitted to the French Parliament for review. It is still unclear whether it can pass the parliament as scheduled. French Prime Minister Le Corny said the government stands ready to make the necessary compromises on the content of the draft budget in order to allow the country to have a budget. (over)