public sector debt

Public sector debt, also known as government debt, is the total amount of money that a government owes to lenders. It accumulates when a government spends more than it collects in taxes and other revenues, borrowing the difference to fund services, infrastructure, or cover deficits. This debt can be domestically held or owed to foreign lenders. Managing public debt involves balancing borrowing with economic growth and fiscal responsibility to ensure it remains sustainable without creating financial instability.