PARIS (Reuters) – France’s public sector budget deficit is likely to come in smaller than expected this year and any extra tax income should go towards reducing the public debt, the budget oversight panel said on Wednesday.

    According to the government, the budget deficit for this year will be 8.4% of the gross domestic product. It is expected that it will fall to 4.8% in the next fiscal year once the economy has recovered from the coronavirus crises and any support measures have been withdrawn.

    According to the law’s High Council for Public Finances (an independent entity that is mandated by law, it was supposed to determine whether government budget assumptions are realistic). It also said the economy was recovering quicker than predicted.

    The body’s judgment regarding the 2022 budget plan said that “as a consequence of the additional income that would result,” and will present its findings to the cabinet Wednesday.

    The body stated, “For 2022 (tax) income related wages could also be underestimated” and that they were not able to predict the deficit for 2022.

    Public debt will reach 116% GDP by the end of this year. The body stated that any income earned should go to debt reduction to maintain a sustainable public finance system.