Public Expenditure, Stock of Public Debt and GDP growth – The case of Albania

Abstract

The purpose of this paper is to study the impact of public expenditures - both current and capital expenditures on the growth of Albania's GDP. Also the impact that public debt has on the country's GDP. In the last 20 years, Albania has had a very dynamic development of both its debt and its current and capital expenditures. It is in the best interests of every country to know if these expenses are positively affecting the economic development of the country and if the public debt is utilized and used in the right way to give positive effects to the economy. The data were obtained for the period 2000-2020 for Albania and their source is the Ministry of Finance and Economy of Albania. In studies and articles carried out by different researchers, a significant negative relationship between the level of debt and economic growth has been seen. The main reason for this negative impact is because a very high portion of income will go to pay the interest on the debt.