- This morning, the French Budget Bill for 2023 was presented to the Council of Ministers. The total financing requirement will stand at €305.5bn, mainly consisting of €158.5bn to cover the deficit to be financed, down €14.1bn compared to the revised deficit for 2022, and €151.6bn to redeem medium- and long-term debt maturing in 2023, up €10.8bn compared to the figure in the 2022 Supplementary Budget Act (LFR).
- The financing requirement in 2023 will be met by (i) the medium- and long-term government debt issuance programme, net of buybacks, worth €270.0bn (ii) a €18.0bn drawdown of the Treasury’s account (iii) an increase in outstanding short-term government securities (BTFs) for €10.4bn (iv) €6.6bn of Covid debt redemption from la Caisse de la dette publique (v) and other cash resources of €0.5bn.
- State debt service is expected to stand at €51.7bn, including €0.9bn in interest charges connected with the partial absorption of SNCF Réseau debt.
- The net year-on-year increase in the nominal value of negotiable State debt with maturities of one year or more will be capped at €118.4bn, 0.8 billion less than in 2022.
- The detailed medium- and long-term financing programme for 2023 will be released in December 2022.
- At the beginning of the year 2022, the weighted average yield on medium- and long-term debt securities stood at 1.18%, compared to a historic low of -0.05% in 2021, an average of 1.26% from 2009 to 2020, and yields of 4.15% from 1998 to 2008.
- The deficit to be financed in 2022 has been revised downwards to €172.6bn, compared to the amount of €178.4bn provided for in the 2022 LFR which was adopted in August 2022.
- The drawdown of the Treasury’s account stood at €49.8bn, decreasing by €2.4bn from the amount provided for in the 2022 LFR.
- “Other cash resources”, including the recording of net treasury premiums, are projected at -€5.7bn, compared to -€2.3bn in the 2022 LFR.
- Outstanding BTFs will remain stable as expected in the 2022 LFR.
- For 2022, issuance of medium- and long-term debt, net of buybacks, will remain flat at €260.0bn.
- State debt service is expected to stand at €51.2bn, versus €51.4bn in the 2022 LFR, as a result of the brief fall in rates observed during summer 2022.
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