Abstract

This research work was embarked upon with a view to empirically investigate the impact of budget deficit on Nigerian economy.3specific objectives, 3 research questions and 3 research hypotheses were formulated to guide the study on the impact of budget deficit on the economy. The data was obtained from the CBN Statistical Bulletin (1970 – 2016) and analyzed using ordinary least square analysis. The results showed that an increase in money supply and FDI and decrease in budget deficit brings an improvement in the economy of the nation. It was recommended that commitment to budget should be encouraged for fiscal discipline on the part of the government and its agencies. The government and the Debt Management Office (DMO) should draw up guidelines to limit the growth of future domestic debt.