Fiscal crisis

A fiscal crisis occurs when a government faces severe financial trouble, often due to excessive debt or rising deficits. It typically happens when the government cannot meet its financial obligations, leading to potential defaults on loans or inability to pay public services. This can result from economic downturns, mismanagement, or rising expenditures without matching revenue. During a fiscal crisis, governments may be forced to implement austerity measures, increase taxes, or seek bailouts from other entities. This can affect public services, economic stability, and citizen welfare, leading to broader social and economic challenges.