Analytical Study of the Relationship Between Government Expenditure, Government Revenues and Budget Deficit in the Libyan Economy During the Period (2015-2024)

Abstract

The study aimed to analyze the relationship between components of public expenditure, public revenues, and the general budget deficit in Libya during the period that witnessed political fluctuations, internal division, and oil price volatility between 2015 and 2024. The study depended on annual published data issued by official Libyan institutions and used the descriptive-analytical method and statistical tools, including trend analysis and correlation matrix. The main findings of the study revealed wide fluctuations in the deficit/surplus value associated with oil revenue volatility and expenditure expansion. The results show there is a moderate to strong positive correlation between public expenditure and the deficit (0.441) and a relatively strong positive correlation between public revenues and the deficit (0.664) with the weak effect of non-oil revenues (0.201). The study recommended developing sustainable non-oil revenues and rationalizing current expenditure and establishing a precautionary mechanism to deal with oil shocks and political fluctuations