Faced with growing economic challenges, the Ministry of the Economy is presenting a 2025 budget marked by a dual ambition: reduction in public spending and acceleration of the environmental transition. A balancing act that raises questions about French economic growth.
An unprecedented austerity cure for public finances
The Minister of the Economy, Antoine Armand, presented Monday October 21 to the National Assembly a drastic plan to reduce public spending. Stated objective: eliminate 5 billion euros of “non-priority” spending by 2027, with a first step in 2025 targeting 60 billion in savings to reduce the public deficit to 5%.
This complete review of expenses targets in particular tax loopholes deemed “unjustified” or “incompatible” with government objectives to support employment and decarbonization.
To achieve this, the executive is counting on an unprecedented mobilization of all public administrations, which will have to report annually on their budgetary efforts.
However, the OFCE is sounding the alarm, forecasting a negative impact on growth which could fall to 0.8% in 2025, compared to 1.1% expected in 2024.
The “green budget”, a priority reaffirmed despite austerity
In parallel with these budgetary restrictions, Bercy announces a record “green budget” for 2025, demonstrating its desire to maintain the course of ecological transition. Environmentally friendly spending will reach 42.6 billion euros, an increase of 2.1 billion compared to 2024.
This envelope, described as “unprecedented”, will finance in particular support for the production of renewable electricity and the energy renovation of buildings.
This environmental orientation is reflected in a 35% increase in green spending between 2022 and 2025, while unfavorable environmental spending decreased by 15% over the same period. A considerable effort which demonstrates a profound reorientation of the State's budgetary priorities, despite the context of austerity.
The major challenge for the government will be to reconcile these environmental ambitions with the objectives of restoring public accounts, while preserving the purchasing power of the French, already undermined by the gloomy economic outlook for 2025.
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