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Economies that have both a fiscal deficit and a current account deficit are often referred to as having "twin deficits. The opposite scenario—a fiscal surplus and a current account surplus—is generally viewed as preferable, but much depends on the circumstances. China is often cited as an example of a nation that has enjoyed long-term fiscal and current account surpluses. A fiscal deficit , or budget deficit, occurs when a nation's spending exceeds its revenues. The U. Intuitively, a fiscal deficit doesn't sound like a good thing. When a nation is experiencing a recession , deficit spending on infrastructure and other big projects can contribute to aggregate demand.
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