Based on national strategies such as expanding domestic demand and constructing the Chengdu-Chongqing Economic Circle, this study utilizes panel data from 173 counties in the Chengdu-Chongqing Economic Circle from 2013 to 2018 to establish a spatial econometric model, investigating the consumption effect and spatial spillover effect of public expenditure. The study finds that the increase in public expenditure in the Chengdu-Chongqing Economic Circle not only promotes consumption growth within the region but also improves consumption levels in adjacent areas through spatial dependence among counties. Public expenditure and household consumption show a complementary relationship from 2013 to 2015 and a substitution relationship from 2016 to 2018. Heterogeneity tests reveal that public expenditure significantly promotes clothing, housing, education, culture, and entertainment expenditures for residents, while it significantly suppresses healthcare expenditures. It has no significant impact on expenditures related to food, tobacco, alcohol, household goods and services, and transportation and communication.