Definition of government debt

What a government borrows to ensure it can finance all its planned expenditure (and plug its budget deficit). If a government is running a budget surplus, it should not in principle need to increase its debt. A government will normally borrow money by issuing bonds or other securities. Local governments, specific departments or agencies may issue their own bonds to finance expenditure. Rather than issuing paper, the government of a developing country with low credit ratings may need to negotiate loans from foreign governments, institutions such as the World Bank or overseas bank creditors.