Measuring and Analyzing the Effect of Public Expenditure on the Inflation Rate in Egypt for the Period (2000-2014)

Mohammed Nada, Raad

	Measuring and Analyzing the Effect of Public Expenditure on the Inflation Rate in Egypt for the Period (2000-2014)
Tikrit Journal For Administration & Economics Sciences
Article 1, Volume 2, Issue 38, 2018, Pages 390-412
Author
Raad Mohammed Nada
Abstract
Abstract Public expenditure is one of the tools of fiscal policy. It reflects the role of the state in intervening in economic life and guiding economic activity to achieve economic stability. The inflation has multiple causes, and most countries suffer from high inflation rates. The inflation phenomenon has become global as countries seek to improve the value of their currency as well as some countries seek to achieve certain growth rates of which the rise in inflation rates are not accompanied by specific political and economic factors. Egypt is suffering from high inflation due to various factors. Therefore, the research aims to show the importance and role of public expenditure in the rate of inflation in Egypt and to measure and analyze the relationship between public expenditure and inflation rate in Egypt. The research found that public expenditure in Egypt is increasing until it reached LE 265,857 million in 2014, which is the highest value. The compound growth rate of public spending in Egypt during the period of research was 4%. The inflation rate in Egypt was 18.23. The research recommended: - Increasing the volume of public expenditure, which in turn represents an increase in the aggregate demand side, must be matched by a similar increase in the overall effective supply side. - Follow the economic policies to eliminate the imbalance in the relationship of growth between sectors of the national economy, and contribute to increase the productivity of commodity sectors and increase the real supply of goods and services in the Egyptian economy, - Activating the role of fiscal policy that contributes to controlling inflation rates and activating the role of monetary policy through its tools to contribute to the treatment of inflation, - Follow policies that contribute to reducing the damage caused by high inflation rates on Egyptian society.

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