Appraise macro economic objectives of fiscal policy in nigeria

Ininterest payments alone exceeded 20 per cent of government revenue in several countries in Africa, Latin America and South Asia Figure 2. The general sales tax was unified at 16 per cent, removing exemptions on food items.

impact of fiscal policy on economic growth pdf

One major weakness of the study was that it omitted impact of important variables such as education, health care and public order and security.

Contractionary fiscal policy, on the other hand, is a measure to increase tax rates and decrease government spending. Meanwhile, progress in reducing the fiscal deficit in Sri Lanka has been slow, in part because of increased spending to mitigate the effects of natural disasters.

Iraq is also benefiting from lower defence expenditures, amid a stabilizing security situation. Excluding Egypt and Libya, the fiscal deficit in North Africa averaged 4.

How does fiscal policy stabilize the economy

Iraq is also benefiting from lower defence expenditures, amid a stabilizing security situation. In Brazil, a combination of moderate primary deficits and high interest expenditures has resulted in large overall fiscal deficits, averaging 9 per cent of GDP in — But lagged public investment in human capital was found to adversely affect growth. Furthermore, relatively strong oil receipts solidified the current account surplus to an estimated 3. This severely constrains the capacity to implement countercyclical policies to stabilize and support domestic demand and to deploy redistributive interventions to promote more inclusive development. Recent fiscal stimulus measures are expected to add roughly 0. The empirical results showed that 1 percent increase in public spending raised the real GDP by 1.

Since Januarydeteriorating fiscal situations have led to credit rating downgrades in several countries, including Brazil, Chile and Costa Rica. Due to the internal conflict, defence spending remains significant. In Central Africa, after a sharp increase peaking at 8.

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The Effect of Fiscal Policy on Economic Growth in Nigeria