On Thursday, June 26, 2025, the French government said that it needs to cut an extra $5 billion from the public budget this year to keep the country’s budget deficit at 5.4% of GDP. The country is dealing with a debt that is now 114% of GDP, which is about $48,800 per person.
Hard Decisions to Stay on Track
Bercy, the Ministry of the Economy, said that $3 billion in planned state spending will not happen this year. More budget reserves will be announced in the next few weeks. This comes after Labour and Health Minister Catherine Vautrin said on Wednesday that the government would save $1.7 billion on healthcare costs. These steps are meant to help close the gap to reach the 2025 deficit target, which is down from last year’s 5.8%, even though economic growth has been slower than expected.
Breakdown of Key Budget Cuts
| Source of Savings | Amount (in USD) |
|---|---|
| Cancelled planned state spending | $3 billion |
| Healthcare cost savings | $1.7 billion |
| Additional budget cuts (TBD) | $0.3 billion |
| Total Savings Target | $5 billion |
The government is working quickly to make sure these cuts happen. On July 4, the top financial officials from all ministries will meet to work out the details and make sure everyone is held accountable. This isn’t the first time this year that the government has had to cut spending. In April, they promised to cut $5 billion in spending to stay on track.
The Future of the Economy and Its Problems
The French economy is expected to grow by between 0.6% and 0.7% in 2025. The government is sticking to the higher end of that range, while the Bank of France and INSEE are sticking to the lower end. As the government tries to balance fiscal discipline with economic realities, these low expectations put even more strain on an already tight budget.
During the second meeting of the public finance oversight committee at Bercy, government officials told members of parliament, local representatives, and social security stakeholders what changes needed to be made to meet the budget goals for 2025. This time, Economy Minister Éric Lombard led the meeting instead of the Prime Minister, who spoke in public at the first meeting in April. Lombard told the press that openness was important, saying, “We’re here to keep the French people up to date on how we’re carrying out the 2025 budget and getting ready for the 2026 finance law.” He admitted that the road ahead would be hard, saying that the country needs to save $40 billion by 2026 and that everyone needs to work together to do this.
A Call to Come Together
The French government is saying that everyone will need to help out as the country deals with these money problems. These cuts are just the beginning of a bigger effort to stabilise the country’s finances while keeping promises to its people. The deficit is being looked at closely, and the 2026 budget is coming up soon.