The deficit ratio measures a government’s fiscal shortfall relative to the size of its economy. It is calculated by comparing general government borrowing with GDP, using the prices prevailing during the relevant period. The figure can describe either an expected outcome in budget plans or the result reported after the period ends. Positive values generally signify a deficit, while negative values indicate that public revenues exceeded expenditure. Comparisons should take account of economic conditions, temporary fiscal actions, and revisions to national output.
Source: European Central Bank (ECB) (source). This glossary entry is an independently worded adaptation of the cited information.