France’s public debt has risen again in the third quarter, reaching 113.7% of GDP (gross domestic product) at the end of September.
This is up from 112.2% at the end of June, as the French National Institute of Statistics and Economic Studies (Insee) reported on Friday. From July to September, the country's total debt increased by €71.7 billion, amounting to €3.303 trillion.
The rise in public debt in France is mainly attributed to the French State, which saw its debt increase by €59.8 billion to €2.6905 trillion after a previous rise of €70 billion in the previous quarter.
France’s public debt, which remained between 60% and 70% of GDP in the early 2000s, surged after the 2008 crisis. It stabilised around 100% at the end of the 2010s, before jumping again due to substantial spending during the Covid-19 crisis.
As France grapples with political turmoil following the dissolution of the National Assembly by President Emmanuel Macron in June, the economy is slowed by uncertainty.
Last week, credit rating agency Moody’s downgraded France’s sovereign credit rating by one notch to Aa3. This unexpected move, made outside the agency’s regular biannual schedule, was to account for new uncertainties stemming from the collapse of the Michel Barnier government.
Like Belgium, France is currently subject to an excessive deficit procedure. Triggered by EU regulators, the procedure requires a Member State to submit a multi-year budget plan to the European Commission, outlining how it will reign in overspending.
Both Belgium and France have postponed the initial autumn deadline to submit their budget plans amid political uncertainty – in Belgium's case because of ongoing negotiations to form a Federal Government.