Countries employ a budget to track spending based on earnings. Many countries commonly run a deficit, with more money going out than coming in. Based on data from the Organization for Economic Cooperation and Development (OECD), five countries have the largest budget deficits, calculated as a percentage of 澳洲幸运5官方开奖结果体彩网:gross domestic product (GDP).

What Is a Budget Deficit?

A 澳洲幸运5官方开奖结果体彩网:budget deficit occurs when government spending exceeds its revenues. A deficit is the opposite of a surplus. A deficit can indicate a nation's financial strength and the state of its economy. While debt may be used to invest in government projects like infrastructure, politicians lament over rising deficits or how much a government is adding to its national debt. Tax cuts may be a boon to citizens, but that loss of revenue may increase a nation's deficit.

Governments may issue bonds, and interest rates on a country's bonds are determined by the market's evaluation of a country's ability to pay back its debt. 澳洲幸运5官方开奖结果体彩网:Rising deficits lead to hi💧gher rates, especially if a country lacks sufficient savings.♕

Deficits eventually comprise a country's 澳洲幸运5官方开奖结果体彩网:national debt. Each year's deficit or surplus determines the trajectory of the debt. These defi𓃲cits are correlated to a nation's broader economy and, with the community so intertwined, the global economy as a whole.

Deficits by Country

A deficit is defined as the income versus expenditure of a government, including capital income and capital expenditures. A government has a deficit when it requires financial resources from other sectors. All OECD countries compile data based on deficits as a percentage of GDP. As of 2022, the leading deficit holders included:

• Italy -7.8%
• Hungary -6.3%
• South Africa -4.8%
• Spain -4.7%
• France -4.7%

Deficit vs. Debt

A budget deficit occurs when the government spends more than it receives as revenue and may be forced to raise additional money. In the U.S., the federal government borrows money by selling U.S. Treasury bonds, bills, and other securities. The national debt is the accumulation🌃 of this borrowing along with associated interest owed to investors who purchased these securities.

As of 2023, the country with the highest debt is the United States, and twice that of any other country. Globally, the top five countries with the greatest debt value were:

• United States
• China
• Japan
• Germany
• United Kingdom
  

The Bottom Line

Deficits occur when a nation's government's expenses exceed its revenue, while a surplus means it spends less than it earns. A deficit indicates a country's financial fitness and economic snapshot. Excessive spending may spur economic growth, especially if expenses pay for infrastructure and job growth.