Government borrowing refers to the practice of a government obtaining funds by issuing bonds or taking out loans to finance its spending when there is a budget deficit. This allows the government to meet its obligations and fund various programs.
Related terms
Budget deficit: A budget deficit occurs when a government's spending exceeds its revenue in a given period, leading to increased borrowing.
National debt: The total amount of money that a country owes due to accumulated deficits over time.
Interest rates: The cost of borrowing money which influences how much the government has to pay back on its borrowed funds.