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What is Primary Deficit? - Economics

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Definition

What is primary deficit?

Explain the meaning of Primary deficit

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Solution

The primary deficit refers to the difference between the fiscal deficit and interest payments. Since fiscal deficit reflects the borrowing requirements of the government, it can be said that the primary deficit refers to the difference between the government’s borrowing requirements and its interest liabilities.
Primary Deficit = Fiscal Deficit – Interest Payments

Concept: Deficit Budget - Primary Deficit
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