2025, Vol. 8, Issue 2

The research measures and evaluates the degree to which government spending affects certain macroeconomic variables in Iraq between 2010 and 2024 using a descriptive-analytical approach supported by an econometric methodology. The study examined the relationships between government spending and GDP, unemployment, and inflation. The results showed that while government spending had a big impact on GDP, the majority of current spending limited its ability to provide sustainable growth. It also became clear that it was unable to reduce unemployment rates because it placed more focus on government employment than on the development of quality jobs. The research discovered a positive correlation between inflation and prices in most years because current expenditure contributed to an increase in aggregate demand, which in turn raised prices because of insufficient production capacity. The study concludes that government spending priorities must be restructured toward investment sectors and reduced reliance on oil revenues to achieve sustainable economic stability.