The government of Ethiopia for the past ten years is exercising an expansionary fiscal policyrnwith the aim of providing major public infrastructure services in the country. With regard to this,rnthe government have increased the level of total public expenditure by more than hundredrnpercent in GTP periods.rnTaking in to account the shortage of capital to finance public expenditures in Ethiopia, both thernshort run and long run effects of this government spending have to be measured to determinernwhether the expenditure is creating the intended economic growth. Short run economic outburstrncan misled governments that the existing public expenditure will have a positive outcome also inrnthe long run while it may not. On the other hand, the increase in public expenditure can result inrnresource absorption from the productive private sector, which most scholars argue to be morernefficient, to public sector.rnThe objective of this paper is to analyze the impact of government spending on economic growthrnin Ethiopia. In doing so, considering the complexity of the link between government spendingrnand economic growth, both descriptive explanations and econometric analysis were applied inrnthe study. In addition, key informant interview was made in order to triangulate the empiricalrnresults obtained.rnThe descriptive analysis found that the trend of public spending in Ethiopia and the deficit levelrnis growing adjacently in recent years. However, the level of accumulated public debt borrowedrnto finance the deficit is at low risk according to IMF standard of high risk dept level. Thernempirical analysis found that public spending on social sectors has positive long run effect onrnthe growth of real percapita income while spending on general services is suppressing itsrngrowth. From the selected infrastructure sector components, while public expenditure on electricrnpower sector has significant positive effect, road sector development has insignificant effect onrnthe growth of real percapita income growth