Analysing the main trends in government recurrent and capital expenditures and their impact on economic growth

Abstract

This dissertation seeks to analyse the underlying recurrent and capital expenditure trends and the resulting type, composition and drivers of the Government of Malta's expenditure trends and their sustainability within the context of Malta's efforts to adhere to the requirements of the EU's Stability and Growth Pact. Entry into the Euro Area shifted the composition of Government expenditure towards productive expenditure both of which recurrent and capital expenditures resulted into a positive correlation with economic growth. However there is a need for structural reforms as demographic shifts stemming from ageing population are increasing the composition of other expenditures in the Maltese economy.