Investors: What is the difference between public debt and budget deficit?

As enshrined in the Public Debt Framework Law, Law No. 7/98 of 3 February, "recourse to direct public debt must be in line with the financing needs generated by the execution of the State's priority tasks, as defined in the Constitution of the Portuguese Republic, and to safeguard, in the medium term, the tendential balance of public accounts".

In other words, public debt is issued when budget revenues are not sufficient to ensure the financing of fundamental tasks for the country. In turn, the budget deficit is the excess of expenditure in relation to budget revenue in a given year. Thus, the budget deficit tends to be equal to the new debt issued in the year and the difference between the public debt values ​​in two consecutive years (two stocks).