Author(s): Salam Hasan Umeh, Hussein Shnawa Majed
Increasing consumption over investment overheads leads to debt. When this problem emerged, industrial countries tried to solve this dilemma. Experts in these countries strived to find sources of increasing internal debt. Even investigating welfare, as a factor that may contribute to increase debt. Those industrial countries put a huge effort investigating this problem because they didn’t experience debt before. However they did in the period of World War 1 and 2. This study aims to know the characteristics in which the volume and trends of public spending are determined. In addition, this paper tried to analyze and measure the relationship between governmental expenditure and debt on all over Iraqi economy between (2004-2019). Finally, this paper proposed a future perspective for governmental expenditure that can lower debt magnitude. This paper also got some conclusions such as; explanatory variables showed positive statistically significant. In other words, governmental expenditure recorded a significant effect on debt in Iraq. This is consistent with the hypothesis of the study. In terms on recommendation, activating non-oil sectors in supporting governmental budget sections such as agriculture, industry, trade, and infrastructure is very recommended. This is important due to its role in increasing indications of financial sustainability.