What are the roles of deficit financing in a developing economy?

Deficit financing in a developing economy plays a crucial role in stimulating economic growth and infrastructure development when resources are limited. It allows governments to fund essential projects, such as education, healthcare, and transportation, which can enhance productivity and improve living standards. Additionally, by injecting capital into the economy, deficit financing can help create jobs and boost consumer demand. However, it must be managed carefully to avoid excessive debt and inflation, which could undermine long-term economic stability.