Fiscal adjustment and economics growth in Senegal

Mamadou Diop, Abdoulaye Traore and Adama Diaw
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Mamadou Diop: University of Cheikh Anta DIOP, Dakar
Abdoulaye Traore: University of Cheikh Anta DIOP, Dakar
Adama Diaw: University of Gaston Berger, Saint-Louis

Theoretical and Applied Economics, 2025, vol. XXXII, issue 1(642), Spring, 365-386

Abstract: This article analyses the impact of budget cuts in operating and capital expenditure on short- and long-term economic growth. The results suggest that cuts in investment expenditures have a more pronounced effect on short-term economic growth, with a loss of 0.162% of potential growth for each 1% reduction in investments. In contrast, cuts in operating expenditures have a more moderate effect, leading to a reduction of 0.04% in short- term growth, but their impact intensifies in the long term, reaching a decrease of 0.08%. For better public finance management, these results urge public authorities to further reduce operating expenses.

Keywords: operating expenditures; investment expenditures; economic growth. (search for similar items in EconPapers)
Date: 2025
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