Should we be worried about France’s debt level?
Baptist Morin
French debt fell slightly in 2022, INSEE said on Tuesday. Good news, while the latter still appears at nearly 111.6% of GDP. But is this level of debt really worrying? Europe 1 is looking into the matter.
It’s a good surprise. The French debt was reduced to 111.6% of GDP in 2022, thanks to the growth of the Hexagon revealed by INSEE, while the deficit is at 4.7%. A figure below government spies. And if the country’s debt is less serious than expected, it continues to exceed 100%. But is such a level of debt a concern? Europe 1 takes stock.
Cost of debt
Because the debt is the accumulation of successive deficits. Since the early 1970s, France has been running a public deficit. But States can live with high or even very high debt, like France, whose risk of default is considered very unlikely. We then say that “the debt is sustainable”.
But the problem is the debt burden, that is to say the cost of this debt. It all depends on the rate levels. However, since the beginning of the inflationary period, the European Central Bank has regularly raised its rates to fight against inflation. A mechanism that automatically increases the debt burden. The latter has thus increased from 31 billion euros in 2021 to 42 billion euros in 2022.
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