Deficit

A deficit is the situation in which, over a given period, outflows exceed inflows, resulting in a negative balance, also called a shortfall.

The term is used above all in economics and public finance: a budget deficit, for example, occurs when a State’s spending exceeds its revenue in a given year. In a business context, it indicates a negative result between costs and revenues.

A deficit is distinct from debt: the former concerns the imbalance of a single period, the latter the overall stock accumulated over time. A repeated deficit tends to increase debt.

Disclaimer: This entry is for information purposes only and does not constitute investment advice, a recommendation or a solicitation to invest.

Correlated words

Indicator

An indicator is a technical-analysis tool that processes historical price or volume data to describe a market's past behaviour.

Financial Instrument

A financial instrument is a contract that grants financial rights, such as shares, bonds or derivative products, to its holder.

Purchasing power

Purchasing power refers to the quantity and quality of goods and services that can be acquired with a given amount of money.

Bonds

Bonds are debt securities through which an issuer raises capital, committing to repay it together with a form of remuneration.

Default

A default is a debtor's failure to meet the payment obligations arising from a debt or a financial instrument such as a bond.

CPI

The Consumer Price Index (CPI) is the principal measure used to track inflation, reflecting the average price change over time.

Capital

Capital refers to funds or assets for investment or economic activities crucial for business growth and development.

Capital gain

Capital gain is the profit earned from selling an asset at a higher price than its purchase cost, commonly realised in stock markets.

Commercial Bank

Commercial Banks cater to individuals and small businesses, offering deposit accounts, loans, and other traditional banking services.

Central Bank

The Central Bank sits atop the banking hierarchy, working with the government to regulate monetary policy and currency issuance.

Stocks

Stocks are financial instruments representing ownership shares in a company, entitling holders to a portion of the corporate profits.