Impact of External Debt on Economic Growth in Pakistan for the Period (2010-2018)

Abstract

This study explores the impact of external debt on economic growth in Pakistan. This study used annual data for the period (2010-2018). This annual data was taken from the World Bank sources for the period 2010 to 2018. It is supposed that external debt helps developing countries to fulfill their basic needs. Although debt services pursue development by returning credibility to current and new creditors. To pursue the target of this research, using three variables i.e., External debt, GDP (gross domestic product), and External debt servicing, taken to examine these variables on the economic growth of Pakistan. By using external debt as a ratio of gross domestic product (GDP) as an independent variable, and GDP growth rate as a dependent variable. Now we are going too examined there is a negative impact of external debt on the economic growth of Pakistan. This study concludes that they must go on other options of debt tolerance and must request foreign direct investment FDI.