government deficit

A government deficit occurs when a country's spending exceeds its revenue—mainly from taxes—in a given period, usually a year. This means the government has to borrow money to cover the difference. While deficits can help fund necessary projects or stimulate the economy, sustained deficits may lead to increased debt, which can pose long-term financial challenges. Essentially, a deficit is the shortfall between what the government spends and what it earns in a specific timeframe.