France Budget Deficit Narrows in January-February

France’s state budget deficit narrowed to EUR 32.1 billion in January–February 2026 from EUR 40.3 billion in the same period last year, amid higher revenues and lower spending. Total revenues increased by 16.0% year-on-year to EUR 52.5 billion, driven by increased VAT receipts and a sharp rise in non-tax revenues. Net tax revenues totaled EUR 43.5 billion, reflecting a higher State share of net VAT and other net tax revenues. Meanwhile, total expenditures fell by 1.3% to EUR 76.8 billion, primarily due to reduced general budget outlays amid delays in certain payments for intervention expenditures carried out by the social ministries. Special Treasury accounts posted a deficit of EUR 7.8 billion, largely unchanged from EUR 7.7 billion in the previous year.

France’s state budget deficit narrowed to EUR 9.7 billion at the end of January 2026, compared with EUR 17.3 billion a year earlier. Total revenues rose sharply by 49.4 year-on-year to EUR 36.3 billion, supported by stronger VAT receipts and a significant increase in non-tax revenues, notably the reimbursement of unused endowments under past investment programs. Net tax revenues increased to EUR 28.7 billion, although income tax and corporate tax collections declined annually. Meanwhile, total expenditure rose by 4.6% to EUR 39.6 billion, driven by higher defense spending, increased investment outlays, and larger transfers to the European Union, partly offset by slightly lower operating costs and debt servicing expenses. Special Treasury accounts recorded a deficit of EUR 6.5 billion, widening from EUR 3.8 billion a year earlier, largely due to timing effects related to VAT transfers to local authorities.

France’s central government budget deficit narrowed to EUR 124.7 billion in the January-December period of 2025, down from EUR 156.3 billion a year earlier. Government revenues rose 8.6% year-on-year to EUR 387.7 billion, supported by higher net income tax, corporate tax, VAT, and other net tax receipts. Non-tax revenues increased by 3.4%, reflecting higher dividend receipts, administrative fines, and other miscellaneous receipts, despite lower EU contributions linked to the co-financing of the National Recovery and Resilience Plan. Meanwhile, total expenditures slightly declined by 0.2% to EUR 510.2 billion, driven by higher debt service costs, increased spending on energy services and military operations, and higher transfers to local authorities and the EU, partly offset by reduced payments to public operators and the removal of the Covid-19 debt amortization program. Special Treasury accounts posted a EUR 2.3 billion deficit, improving from EUR 2.4 billion in December 2024.