A country's budget deficit can be divided into two types based on its underlying cause: structural deficit and cyclical deficit.
A structural deficit exists even when the economy is performing well. It results from permanent policy issues like excessive spending, inadequate tax collection, or structural weaknesses in the fiscal system.
A cyclical deficit is caused by the natural ups and downs of the business cycle. During recessions, tax revenues fall and government spending rises (on things like unemployment benefits), creating this temporary deficit.
In Bangladesh, there is typically a structural deficit problem — government spending exceeds revenue even when the economy is growing. The main reason is the very low tax-to-GDP ratio of around 7-8%, one of the lowest in the world.