France’s economic death spiral: Macron crisis as debt hits 116% of GDP

According to the National Institute of Statistics and Economic Studies (INSEE) in France said public debt due to the virus soared last year to 115.7 percent of gross domestic product (GDP). The institute found the deficit widened to 9.2 percent, marking the highest level since after World War 2.

Before the crisis, France’s debt stood at 97.6 percent of GDP and the deficit was around 3.1 percent.

However, the pandemic plunged the country’s economy with a recession of 8.2 percent.

Mr Macron’s government were pushed to support the economy in a bid to avoid job cuts and bankruptcies of companies due to the pandemic.

The INSEE warned growth in spending and “contraction in revenue” are more pronounced than in 2009 during the financial crisis.

They added: “Revenues had then decreased by three percent and expenditure had increased by 4.1 percent for a deficit of 7.2 percent.”

According to the INSEE, the general government deficit for last year stood at €211.5 billion, accounting for 9.2 percent of GDP.

This was a staggering increase compared to the 3.1 percent of GDP the year before.

It is believed the French government are planning to reduce the public deficit to 8.5 percent of GDP.

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“Macron will need an economic miracle, and a lot of luck with the pandemic, to keep his crown, and keep France, out of Le Pen’s hands.”

Figures from the International Monetary Fund (IMF) revealed French debt is now running behind Brexit Britain’s, which stood at 111.5 percent.

Back in February, the UK’s spending to fight against the pandemic pushed public finances £19billion further into the red.

The Office for National Statistics (ONS) found Britain’s borrowing in February was £17.6billion more than the year before.

The figure was the highest February borrowing since monthly records began in 1993.

Last year, Chancellor Rishi Sunak warned “hard times are here” as the UK economy crumbled into the worst recession on record.

In August, Mr Sunak said: “I’ve said before that hard times were ahead, and today’s figures confirm that hard times are here.

“Hundreds of thousands of people have already lost their jobs, and sadly in the coming months, many more will.

“But while there are difficult choices to be made ahead, we will get through this, and I can assure people that nobody will be left without hope or opportunity.”

This marked the first time in 11 years the UK has entered into a recession.

Additional reporting by Maria Ortega

source: express.co.uk