Abstract
Government expenditure expresses many positive effects on gross domestic productirrespective to the shape it takes. The degree of influence depends mainly on many factorsrelated to the nature of the economy. Oman as a gulf state, its economic structure isdominated by extraction sector, the output of this sector normally headed to abroad. Thissituation makes the export sector the most influential sector in the economy. Nevertheless,it appeared that government expenditure in Oman had experienced a positive effect, butcould not be regarded as a stimulus to the economy. This does not mean that governmentactivity is useless. On the contrary this activity remains of great importance.
