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min reading ▪ acc
Faced with growing economic challenges, the Ministry of Economy presents a budget for 2025 that is characterized by a double ambition: reducing public spending and accelerating the transition to the environment. A balancing act that raises questions about French economic growth.
An unprecedented cost-saving medicine for public finances
Economy Minister Antoine Armand presented a drastic plan to cut public spending to the National Assembly on Monday, October 21. The target set: to eliminate 5 billion euros of “non-priority” spending by 2027, with a first step in 2025 targeting savings of 60 billion to reduce the public deficit to 5%.
This full review of spending targets in specific tax loopholes was deemed “unwarranted” or “incompatible” with the government’s jobs and decarbonisation targets.
To achieve this goal, the executive is counting on an unprecedented mobilization of all public administration bodies, which will have to report annually on their budgetary efforts.
However, the OFCE is sounding the alarm, predicting a negative impact on growth, which could fall to 0.8% in 2025 compared to 1.1% expected in 2024.
“Green Budget”, priority reaffirmed despite austerity measures
In parallel with these budget constraints, Bercy announces a record “green budget” for 2025, demonstrating its desire to maintain the course of the ecological transformation. Environmental spending will reach 42.6 billion euros, an increase of 2.1 billion from 2024.
This envelope, described as “unprecedented”, will finance in particular the promotion of electricity production from renewable sources and the energy renovation of buildings.
This environmental orientation is reflected in a 35% increase in green spending between 2022 and 2025, while adverse environmental spending has decreased by 15% over the same period. A significant effort that reflects a deep reorientation of the state’s budgetary priorities, despite the context of austerity measures.
The main challenge for the government will be to reconcile these environmental ambitions with the goals of restoring the public accounts while preserving the purchasing power of the French, already undermined by the gloomy economic outlook for 2025.
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