The difference in public spending in France and Germany

Marie Aouriri and Héloïse Tournoux

Rue de la Banque, 2017, issue 46

Abstract: Public spending in 2015 represented 57% of GDP in France compared with 44% in Germany. The difference was only around five percentage points of GDP from 1996 to 2002. Since then, the slowdown in per capita GDP growth in France has not been accompanied by a weaker progression in per capita public spending. Germany has been more successful in keeping its public spending in check, by implementing important reforms, while reporting faster growth in per capita GDP.Divergence in per capita GDP growth accounts for half of the divergence in public spending ratios. Breaking down spending by government function shows that certain differences have remained relatively stable (education,health, defence), and are due primarily to demographic factors or public/private organisation. Others, particularly pension spending, have widened and therefore deserve special attention.

Date: 2017
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