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.