France's borrowing needs will increase in 2018 compared with 2017 as it pays back debts issued during the financial crisis nearly a decade ago, and the government forecasts a wider central-state budget deficit, the French Treasury Agency said on Wednesday.
France's total borrowing requirement will rise to 203.3 billion euros ($240.1 billion) in 2018 from EUR191.7 billion in 2017, the agency, known as AFT, said in a statement.
Out of the total borrowing needs, EUR82.9 billion is for financing the deficit next year. This is higher than this year's upwardly revised deficit of EUR76.5 billion. The first estimate for 2017 budget deficit was EUR69.3 billion, and the increase versus the preliminary plan was financed by treasury bills and other cash sources, the AFT said.
Still, France's overall deficit will decline to 2.6% of economic output in 2018 from 2.9% this year on a narrowing of the social security and local authority deficits, which are not financed by the AFT. The central state budget deficit is carrying most of the cost of tax cuts and increases to defense and education spending.
The AFT will have to repay EUR120.1 billion in redeeming medium- and long-term bonds in 2018, more than this year's EUR115.2 billion.
The AFT plans to issue EUR195.0 billion in medium- and long-term debt, stripped of buybacks, compared with EUR185.0 billion this year, the AFT said.
The treasury agency added that France has continued to benefit from "extremely favorable" financing terms. The weighted average yield on medium- and long-term debt securities stood at 0.67% for the first three quarters of 2017, compared with a historic low of 0.37% in 2016.
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(END) Dow Jones Newswires
September 27, 2017 07:16 ET (11:16 GMT)