The structural balance is used to examine the long-term sustainability of public finances. Fiscal balances can be significantly affected by economic cycles and one-off events. Government revenues tend to decline during economic downturns, as incomes fall. At the same time, public spending tends to increase, as more people claim social assistance or unemployment benefits. Governments may also increase public expenditure to stimulate the economy. All of these effects have been visible during COVID-19. This means that general government fiscal balances do not provide a full picture of governments’ underlying fiscal position. The general government structural balance is a measure of the fiscal balance which takes the economic cycle into account. The structural balance is the budget balance which a government would have with its current policies if the economy was operating at its full potential (“potential GDP”). A government with a structural (primary) deficit would still have a (primary) deficit even if the economy was operating at full potential. This indicates its current tax and spending policies are not sustainable in the long run.