Fiscal policy, which involves government spending and taxation decisions, directly impacts economic growth. Well-designed fiscal policies can stimulate the economy by increasing aggregate demand, creating jobs, and enhancing public services. Conversely, restrictive fiscal measures may slow down growth by reducing household and business spending. The balance between deficits and surpluses is crucial, as excessive borrowing can lead to long-term economic vulnerabilities. Policymakers must consider the economic context and potential socioeconomic impacts when enacting fiscal policies to maximize growth potential and stability.