The aggravation of the crisis forced the government to revise once again its forecasts and its budget for 2020.
the Third version, with billions of additional euros to support the affected areas, and tax revenues in freefall : the worsening of the crisis is forcing the government to revise once again its forecasts and its budget for 2020. Here are the main figures of the draft amending budget.
Fall from 11% of GDP
This new project of the amended finance act anticipates a decline of 11% of GDP in 2020, instead of 8% previously, the highest recession in France since 1945.
This forecast takes into account a restart of the economy only "progressive" to be, " says one at Bercy. It is also based on an assumption of a reopening of the borders in Europe on June 15 and at the end of the summer with the rest of the world. This is an estimate "conservative", according to the High Council of public finance (HCFP).
With the additional spending to support the economy and the recession record, the public deficit will widen to 11.4% of GDP, against 3% last year, anticipates the government.
public debt is expected to soar to 120,9% of GDP, whereas it had reached to 98.1% over the last year. France is as well among the european countries most in debt.
460 billion of support
The government has now provided some 136 billion euros of measures to support the economy, compared with 110 billion projected at the end of April. This makes 57 billion euros of budget expenditures outstanding since the beginning of the crisis, the rest being reports of expenses. Added to this are nearly 327 billion of guarantees (credit, export, etc) granted by the State.
In total, the government has mobilized 460 billion euros, "21% of the national wealth," according to the Economy minister Bruno Le Maire.
45 billion for the affected areas
In detail, the government will provide 45 billion euros to support the sectors most affected by the crisis, said The Mayor. This amount includes fiscal measures and support to the business cash.
The tourism will receive 18 billion euros. This amount encompasses the measures of partial unemployment, loans guaranteed by the State, with nearly 3 billion euros of exemptions social or postponements of taxes.
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The automotive industry will benefit from $ 8 billion. In addition to help to the part-time unemployment and the secured borrowings, this amount includes one billion euros to support the demand for vehicles and a billion to encourage investments to produce hybrid and electric cars in France.
The State will earmark 15 billion euros to the aviation industry and air transport, including $ 7 billion of loans granted to Air France-KLM. The government will also dedicate $ 600 million additional euros to the technology start-ups, including the establishment of an investment fund. Measures are also planned for the areas of culture and in the CONSTRUCTION industry.
part-time Unemployment benefit : 5 billion extra
In total, this draft budget will include about 13 billion euros of budget appropriations additional. The device of partial unemployment, part of which is supported by the Unédic, will be equipped with € 5 billion more than the $ 25 billion already planned. This activity support partial will, however, be reduced for most sectors.
The solidarity fund dedicated to very small businesses and the self-employed is still abounded of € 1.2 billion, bringing its total to more than $ 8 billion.
27 billion revenue flights
as the crisis adversely affects the business, the revenue from compulsory levies should still melt 27 billion compared with the forecast in the previous budget to be rectified. The corporate tax should bring in $ 13 billion less than was projected in the previous amended budget, and now more than $ 32 billion less than what was anticipated in the original budget adopted at the end of 2019.
The VAT revenue they are still expected to plunge from $ 8.5 billion compared to the previous amended budget, or a shortfall of a little less than 20 billion compared to what was anticipated in the original budget. On the other hand, the government does not anticipate any impact at this stage on the income tax. Public expenditure will amount to 63.6% of GDP at the end of the year as a result of the support measures.
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downward Trend of inflation
In its forecast, the government has also taken into account a "downward trend in the inflation outlook", with an estimate "of the order of 0.4% for the year 2020 in France.