This Friday June 19, the Insee – the National Institute for Statistics and Economic Studies – released a study on the French public debt of the first 2020 semester. It increases by 3.1 points in comparison with December 2019: the public debt now reaches 2,438.5 billion euros, which is 101.2% of France’s GDP. It is the highest quarterly increase, after the second quarter of 2009.
According to the report from the Insee, this exceptional increase is mostly caused by “reduced quarterly activity because of the health crisis and supportive measures for companies and households” such as part-time working, and adjourning employer contributions, that dug down the accounts of the social security administrations.
We can also report an 8.7 billion euros increase of the debt of the social security administrations (Acoss – Central Agency for Social Security Organizations, Cades – Social Security Debt Reimbursement Fund, Unédic – unemployment insurance, hospitals, and Cnaf – National Family Benefits Fund). They are the ones who financed most of measures made from mid-March to fight against the economic consequences of the Covid-19 epidemic.
The State’s debt increased by 46.4 billion euros, coming “mainly from the long-term negotiable debt (+52.8 billion euros)” while local public administrations saw their debt increase by 3.3 billion euros, “especially because of the Société du Grand Paris (2.5 billion euros)”, the Insee explains. Regions and towns increase their debt, while departments can reimburse bank loans.
In late 2019, the French public debt reached 98.1% of the GDP. The government expects the consequences of the health and economic crisis to last long. They think the debt could increase up to 120.9% of this year’s GDP.