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Development of the budget enables a direct link between policy priorities, as stated in the country's sectorial strategies, and the priorities in expenditures with the aim of an effective distribution of the country's available resources. A proper budget forecast, supported with clear objectives and set mid-term priorities for all expenditure programs, s a prerequisite for an effective and efficient management in the realization of public expenses. This approach helps us further in the fiscal discipline by enabling us to plan public expenditures realistically, within the macroeconomic and fiscal parameters. We have to add that Kosovo has shown continuous improvements of systematic and political mechanisms and instruments in developing, reviewing and adopting the budgetary plan. Low levels of budgetary revenues and sensible increases of public expenditures have exercised pressures thus, influencing a continuous reduction of government expenditures. Equal to budgetary revenues, government expenditures in Kosovo appear at a medium level of the transitional economies. The purpose of this paper, therefore, is to present an overview of the budgetary expenditures in Kosovo during 2006-2008 and to show that by fighting the negative phenomena, such as the informal economy, the budget can increase and the entire country could benefit from it. [ABSTRACT FROM AUTHOR]