Live Updates > Live Update Details
2026-02-20 21:09:39
[France's 2026 Budget Finalized: Deficit Target Raised, But Defense Spending Surges] ⑴ The French government officially announced its 2026 national budget on Friday, concluding four months of parliamentary debate. Commentators believe this signifies a period of relative stability for the government led by Prime Minister Le Corny, laying the foundation for future policy implementation. ⑵ The deficit target has been relaxed somewhat from the initial estimate. According to the final target, France's public finance deficit rate in 2026 will be controlled at around 5%, higher than the government's initial target of 4.7%, but lower than the 5.4% in 2025. This adjustment reflects the trade-off between economic growth expectations and fiscal consolidation. ⑶ Cutting public spending remains the main theme of the budget. While overall spending is tightened, defense spending receives special consideration, increasing by €6.5 billion. This structural change is closely related to the current geopolitical environment, with a significant increase in the priority of the defense budget. ⑷ Tax policy remains generally stable. The government emphasizes maintaining the existing tax framework, but the final plan includes several new tax provisions compared to the initial version. These new taxes may trigger discontent among businesses, creating potential points of contention for the subsequent implementation of the budget. (5) The finalization of the budget has given the government policy space, but challenges at the implementation level remain. A continued balance needs to be struck between the relaxation of the deficit target and the rigid increase in defense spending, and the business community's reaction to the new taxes will also affect economic vitality and investment confidence.
