Fiscal deficit
Also called: budget deficit, primary deficit, government borrowing
The gap between a government's total spending and its receipts other than borrowing. It equals how much the government must borrow.
It is usually expressed as a share of GDP. The primary deficit is the fiscal deficit minus interest payments on past debt. Large government borrowing adds to the supply of government bonds, which can push up bond yields and other interest rates.
Example
Spending of 260 against receipts of 200 gives a deficit of 60; with GDP of 1,200, that is 5% of GDP.
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- Fiscal policy and government borrowingHow do government taxes, spending and borrowing affect the economy and markets?
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