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France faces a major economic challenge as its public debt will reach a record level of 3,228 billion euros in the second quarter of 2024. This troubling situation raises questions about the country’s financial stability and its long-term economic outlook.
The dizzying growth of debt
French public debt has risen dramatically in recent years. According to the latest data from INSEE, the country’s debt reached 3,228 billion euros at the end of June 2024, or 112% of GDP.
The “whatever it takes” policy introduced during the Covid-19 crisis has left a deep mark on French public finances.
While this strategy helped avoid economic collapse in the short term, it resulted in a spectacular increase in debt. In just seven years, from 2017 to 2024, the debt rose from 2,281 billion to more than 3,200 billion euros.
This trend shows no signs of slowing down. In the second quarter of 2024, the debt jumped by 68.9 billion euros, after an increase of 58.3 billion in the previous quarter.
This acceleration reflects the government’s difficulty in controlling its spending in a tense economic context characterized by persistent inflation and rising interest rates.
Worrying effects on the real economy
The explosion of public debt has concrete consequences for the real economy and the purchasing power of the French. The growing weight of debt service in the national budget limits its ability to invest in key sectors such as education, healthcare or ecological transformation.
In addition, the country’s precarious financial situation makes it more vulnerable to external economic shocks and fluctuations in financial markets.
The recent tension over French interest rates is a clear example of this. This fragility could ultimately threaten France’s economic sovereignty and its ability to pursue an independent policy.
French public debt has now reached critical levels, far from the 60% of GDP set by European rules. France’s economic future therefore seems uncertain. Although the country has managed to maintain moderate growth and low unemployment, the cost of this performance now appears disproportionate.
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