The Impact of government spending on economic growth in Libya (The relationship between public spending and economic growth in the Islamic economy, and the traditional economy)

Abstract

The study explained the impact of government spending on economic growth in Libya. Public spending is one of the tools of financial policy, where the government spends, to achieve its economic and social objectives. Public spending in Islam aims to advance production, increase investment, and its regulation of production allows more investments. The Libyan economy achieved a financial surplus in the period from 2000-2012 AD through measures taken by Libya in economic legislation in order to reduce the burdens on the public budget, and the Islamic economy treated public spending by adhering to the principle of moderation in every type of consumer spending, the investment, and the honest. It is possible to provide the necessary resources to carry out other types, to achieve the interests of the spenders and the deserving alike. Islam, and government spending raises growth rates in the gross domestic product, and addresses the imbalance in economic cycles. The Libyan economy works on government spending to enhance economic growth. This study recommended working to reduce dependence on the oil sector creating other alternative sources of local income by supporting economic sectors and increasing investment spending.