During his greetings to economic players, the Minister of the Economy repeated that the year 2023 would not mark “the return of ‘whatever the cost'”. He also announced “reviews” of public spending from this month of January 2023.
After a year 2022 marked by galloping inflation, the government still gives itself a thumbs up. “We won the first round against inflation“, indeed estimated Bruno Le Maire this Thursday during his wishes to the economic actors. “Thanks to energy shield implemented with the President of the Republic in October 2021, we have kept the level of inflation among the lowest in the euro zone“, highlighted the Minister of the Economy.
In December, the rise in consumer prices slowed slightly, according to INSEE, to stand at 5.9% over one year, after 6.2% in October and November. “We have protected the purchasing power of households, better than in many other European countries“, Continued the number two of the government. Although he claimed to measure “to what extent the continuing rise in food prices is penalizing many of our compatriots, especially the most modest“. This reached 12.1% in December according to INSEE.
“We must now win the second round of the fight against inflation“, added the tenant of Bercy. “Not simply to limit the effects of inflation on our compatriots and businesses, but to bring it down in the months to come.“, he said, saying that “the conditions (were) met for inflation to stabilize and then decline in the course of 2023“. Still according to INSEE, inflation should peak at 7% in January and February, before declining from March.
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“Drunkenness of public spending”
The Minister of the Economy considers that this situation “justifies that we move to more targeted measures in 2023 for households and businesses alike“. He repeated that “2023 will not mark(it) the return of “whatever the cost”“. This “would be the wrong policy at the wrong time, in the face of inflation. It would only further fuel the rise in prices“, he judged.
In addition, after having mentioned the second challenge to be met according to him in 2023, which is the green industry, Bruno Le Maire said a word about a last major challenge according to him: public finances. “There is in France an intoxication of public spending, estimated the former LR. As if public spending erased all difficulty, solved all problems, embellished reality. This drunkenness is an illusion. It leads straight, like all drunkenness, to an unpleasant moment which is the hangover, and which has a name: interest rates“, he developed.
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Because, “for the first time in 15 years, interest rates have exceeded 3% in France“, he recalled. “It is a warning signal that must be heard. The time has therefore come to re-engage in the restoration of public finances, and we know how to do it because we did it in 2017 and 2018. We will do it gradually but firmly“, he advanced. And with “a new method“, he said.
This will pass, from this month of January, through “public expenditure reviews“, he announced. They “will allow us to identify the reforms necessary to respect our public finance trajectory“, he explained, specifying that they would be “carried out each year from this year 2023“. The government hopes to bring the public deficit back below the European limit of 3% in 2027. Their conclusions will be communicated each year.no later than April 1, to feed parliamentary and budgetary work“, detailed Bruno Le Maire.
“In February 2023, we will also launch a public finance meeting, which will be held at the ministry and will bring together economists, international witnesses, representatives of the economic world, parliamentarians, local elected officials“, he announced. Their goal will be topresent the first structural projects for the economy of public financesadded Bruno Le Maire.