Abstract. The purpose of this article is an identification of theoretical and practical aspects of public investments and investigation of public investments in Azerbaijan republic. The research is made based on investigation methods like economic, statistical and systematic analytics, logical summary. As a result of implemented research we have clarified the nature of public investments, evaluated the opportunities of the government to finance such investments, estimated the role of the government in the investment activity and justified its further expansion. The limitation of the research is requirement for more expanded practical information. The practical importance of the research is elimination of some uncertainties incurred in application of terminology of “public investment”, justification for increase of the public investments in the country and application of the research results in conduction of state investment policy. The originality and scientific innovation of the research is that this is the first research in this area in Azerbaijan, detailed investigations were implemented based information obtained from state budget, System of National Accounts and construction sector, the opportunities of government to finance these investments and its role in investment activity was deeply studied.

Key words: public investment, national savings, foreign debt, capital expenditure, state budget.

JEL Classification Codes: H50; H54