What is expenditure?

Expenditure describes the movement of money out of a business, household or government either in return for goods or services or in order to service a debt or meet a legal claim. Expenditure is the other half of the equation that it shares with income.

Where have you heard about expenditure?

Everywhere, in relation to public, corporate and individual expenditure, to the level of expenditure in the economy and to whether or not it is sufficient to maintain demand. Gaps between income and expenditure are filled either by borrowing or saving.

What you need to know about expenditure.

Expenditure is a fundamental aspect of the operation of the economy. Without expenditure there would be no income, given that it is only from spending that earnings can ultimately be generated. Most commentators draw a distinction between two types of expenditure, capital expenditure and current spending. In the former, the outlay is essentially a form of investment as the assets acquired can be expected to deliver some form of return, whether new plant for a company or roads and bridges paid for by the government. By contrast, current spending meets day-to-day expenses, whether a factory's electricity bill or the salaries of civil servants.

Find out more about expenditure.

To learn more about expenditure and how it fits into the workings of the economy, see our definition of currency.