Public finances are the initial branch of the economy and include the public sector, which studies its financing, level of economic activity, resource allocation and income distribution, and thus public revenues and expenditures, which together make up the comprehensiveness of the financial system. Public finances explain the way in which the state disposes of state money. Furthermore, in this way it is possible to see what the costs of state development and leadership are and how the state is financed. Public expenditures are expenditures that the state incurs in accordance with the public interest in order to meet public needs. Very often, the term public expenditures means public needs. Public functions performed by the state affect the range in which public expenditures will move. Given the large expenditures, there is an increase in public expenditures. The reasons for such increases are found in real and apparent causes. It is also important to note that with the emergence of public needs, it is necessary to make a plan for how these needs will be financed, and only then find a way to obtain these funds. The aim of this paper is to analyze public expenditures as expenditures covered by the central government and regional and local government bodies in order to meet public needs. The real and apparent causes of the increase in public expenditures were analyzed. Based on the definition of the principles of public expenditures and their classification and structure, as well as the instruments of their financing, conclusions on the impact on economic development policy are presented.