Why so less countries are in fiscal surplus?

Politics define the countries and politics was all about power and funds supported by expansion whether in form of economy or land. In today’s modern world, actual wars are not easy anymore and the war has shifted to digitalization and the economy. Every country plans out their annual budget to ace in the world.

What is fiscal deficit/surplus?

In the financial governmental budgets, we must have heard about the ‘budget/fiscal deficit’ or ‘budget/fiscal surplus’. In the simplest words possible, ‘fiscal deficit’ or ‘fiscal surplus’ can be be defined as the difference between the government’s total revenue and total spending. It represents the entire amount of borrowing required by the government. Borrowings are not included in the total revenue calculation. If the the total revenue is more than the spending, it will be surplus but if the spending is more than the revenue, it will be deficit.

What countries are actually in surplus?

We must have observed that most of the countries, whether developed or developing, richer or poorer, they are found to be in fiscal deficit and not fiscal surplus. According to WorldAtlas, there are only 26 countries in the world which are in budget surplus. Here is the list:

1Tuvalu26.9 %
2Macau25.2 %
3Qatar16.1 %
4Tonga12.4 %
5Palau10.5 %
6Kiribati9.9 %
7Norway9.1 %
8Micronesia, Federated States of7.1 %
9Kuwait7.1 %
10United Arab Emirates5.0 %
11Saint Kitts and Nevis4.3 %
12Brunei3.7 %
13Oman3.1 %
14Botswana2.7 %
15Antigua and Barbuda2.7 %
16Seychelles2.4 %
17Liechtenstein2.1 %
18Nepal2.1 %
19Lesotho1.7 %
20Marshall Islands1.5 %
21Singapore1.3 %
22Denmark1.3 %
23Belarus1.1 %
24South Korea0.9 %
25Hong Kong0.8 %
26Turkmenistan0.7 %
Countries with budget surplus in 2023

Does the deficit mean that the countries are in loss and its in bad situation?

Technically, yes, countries in fiscal deficit means that they are in “loss” but that doesn’t mean they are in any bad situation. We need to understand that we cannot equate deficit with debt just like we cannot equate minimum payment and outstanding balance when talking personal finance. Moreover, countries with fiscal surplus might not be in greater situation at times because surplus would mean that the savings with the countries and their residents is high as they are piling up their money. This might further indicate that the countries’ gains remain uninvested for long. Investments are essential for every country to be made on time. The fiscal deficit is good until the the economic growth rate of the country is not falling or staying low consistently.


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