The Impact of Public Expenditure on Macroeconomic Variables in Iraq In The Period 2006-2017

Abstract

Public expenditure is considered to be the main element in influencing macroeconomic variables and It is one of the tools of financial policy in which it represents and expresses the role of the state or a country and its interference in economic life by directing economic activity in various economic sectors to achieve the economic and social goals that are set by the state, The Iraqi economy suffers from a number of challenges that related to macro-economic variables as well as structural imbalances and weak contribution of economic sectors to GDP. Hence, the research problem that dealt with the role of the public spending can play on macroeconomic variables. The study aimed to know the impact of public expenditure on macroeconomic variables (economic growth, consumption, investment, unemployment, and inflation).The study concluded that the impact of public expenditure is positive and important to most variables of the study, therefore, with its nature agrees with the economic theory and international experiences that related to growth and economic development. The study recommended the need to increase public expenditure, especially investment spending on the basic economic sectors, particularly, in the preparation of the budget, based on a clear economic and social vision that adopts the principle of diversity in investment fields which aimed at transforming the country's natural resources into another wealth for economic growth sustainable development. This can help to provide the basic basis of the Iraqi economy to overcome the obstacles faced in the variables under the consideration in order to promote a local production and achieve sustainable development, as well as, to allow the private sector to contribute the promotion of private expenditure through the investment projects that are entrusted also enhances the overall economic development of the country.