# What is the primary surplus?

The term primary surplus is the difference between the expenses that a State has and the income obtained from the collection of its taxes. If these spending are greater than ingresos (In which interest payments on public debt should not be included, we will have a primary surplus; if they are lower, we will have a primary deficit.

## Difference between primary surplus and fiscal surplus

This amount can be controlled by the government in the way it manages its fiscal policy (thus modifying its level of expenses and taxes). It is important not to confuse the concept of primary surplus with that of fiscal surplus, which is the concept that includes the payment of interest on the debt (since we are talking about a previously contracted obligation, and not the present or modifiable as is fiscal policy).

## Why find the primary surplus?

The advantage of calculating these results (both primary surplus and faiteth primary) are to know the resources that are being generated in a country. The sustainability of the public debt can be settled with a primary surplus, which will help pay the interest on the debt that the government has.

## Example to calculate the primary surplus

To understand this we are going to explain it through a simple example:

Imaginemos que un país recauda ingresos por valor de 1 000 000€ a través de sus impuestos, y tiene unos gastos de 900 000€ (pago a funcionarios de 500 000 y 400 000€ por sus políticas: acciones que debe llevar a cabo para alcanzar los objetivos planteados).

Según este ejemplo, tendremos un superávit primario de 100 000€ (resultado de 1 000 000€ - 900 000€). Estos 100 000€ podrá utilizarlos para poderlos invertir de nuevo o ahorrarlos.

If, on the other hand, it had had expenses of € 1100, there would be a primary deficit of € 000 and it would have to go into debt to replace the debt it has contracted. This situation should be avoided, as it is usually annoying to have to go into debt to pay what is owed.

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