Capital expenditures and their importance for the economic growth in the Republic of Macedonia
Capital expenditures and their importance for the economic growth in the Republic of Macedonia

Summary/Abstract: This paper considers the public expenditures in the Republic of Macedonia, especially the capital expenditures and their structure in the period from 2005 – 2013. The analysis identifies and explains their effects on economic growth in the country. Most of the public expenditures in the Republic of Macedonia consist of current expenditures, transfers, purchase of goods and services, while the share of capital expenditures is low. There is a trend of slight increase of capital expenditures but they are mostly financed through borrowing, which decreases their impact on the economic growth. The analysis indicated that the reform of the public expenditure structure in the country is necessary, as the public expenditures grow slower compared to GDP growth. The reforming measures should aim to increasing the capital expenditures, especially those that refer to investments that drive economic growth.

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