where Yt denotes the government balance of the studied economy in quarter t as an endogenous variable, n is the number of quarters, k-1 is the number of explanatory variables, i is the coefficient estimate for variable i (i 1,k ), Xti represents the value of the explanatory variable i in quarter t, while ut is the error term in quarter t. The selected explanatory variables are as follows: private sector balance, capital inflow, final consumption expenditure of households and evolution of the real economy