A deficit budget occurs when a government's expenditures exceed its revenues over a specific period, typically a fiscal year. This means that the government is spending more money than it is bringing in through taxes and other income sources. To cover this shortfall, the government may borrow money or use reserves. Running a deficit budget can be a strategic decision to stimulate economic growth, especially during a recession. However, persistent deficits can lead to increased national debt, which may have long-term implications for a country's financial health and its ability to fund public services in the future.