What is primary deficit?

1.	What is primary deficit?
Answer» Primary Deficit: 1. Primary deficit is equal to fiscal deficit minus interest payments. 2. It shows the real burden of the government and it does not include the interest burden on loans taken in the past. 3. Thus, primary deficit reflects borrowing requirement of the government exclusive of interest payments. Primary Deficit (PD) = Fiscal deficit (PD) – Interest Payment (IP)

Answer»

Primary Deficit:

1. Primary deficit is equal to fiscal deficit minus interest payments.

2. It shows the real burden of the government and it does not include the interest burden on loans taken in the past.

3. Thus, primary deficit reflects borrowing requirement of the government exclusive of interest payments. Primary Deficit (PD) = Fiscal deficit (PD) – Interest Payment (IP)

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