The structural deficit is an expression that is used in the economic context, to define the public deficit of a constant nature, which arises regardless of the influence of the economic period on income and expenses. This type of deficit is negative for the economy of any country, indicating poor management of its economic policies.
The structural deficit, together with the cyclical deficit, are those that make up the so-called public deficit, which is understood as the situation that a country goes through when public expenditures are greater than non-financial income.
It is divided into: trend, is one that originates in normal conjunctural circumstances. Discretionary, is one that is conditioned by the government's fiscal policies.
This type of deficit can persist even when the economy is in a high phase of the business cycle. If its size exceeds the gross domestic product of the country it can generate many difficulties since its financing can originate a new expense. If the state looks for a way to finance this deficit, it can do so by applying the following policies: by creating more money, this measure is unfavorable since it can affect prices, causing inflationary tensions that end up damaging growth and employment.
Issuing public debt securities, this will be done in order to obtain savings, in exchange for this the subject who acquires these securities will obtain remuneration. Finally, the state can increase the value of taxes or reduce public spending; It should be said that the implementation of both measures may be unpopular and in the long run may affect the popularity of government management.
