The Impact and Dynamics of External Debt Servicing on Economic Growth of Ethiopia

Getachew Kebede

doi:10.7176/jesd/10-15-05

Abstract

The objective of this study was to examine the impact and dynamics of external debt servicing on economic growth of Ethiopia using data for the period from 1982 to 2018.Hence, to achieve its objective the researcher uses both descriptive and econometric method of data analysis. The analysis was based on secondary data retrieve from World Bank (WB) and Central Statistics Authority (CSA). The econometrics model tests such as unit root test, co-integration test and diagnostic test have been done. The study suggests that both long run and short-run indicates that both growth of gross government expenditure and growth of capital formation have significant positive impact on economic growth of Ethiopia in the long run. Based on the finding of this paper it recommends, the authorities were responsible to promote the growth of capital formation to enhance economic growth of Ethiopia by implementing an appropriate policy. DOI : 10.7176/JESD/10-15-05 Publication date : August 31 st 2019

Highlights

1 .Backgroud of the Study Ethiopia has grown at a rate between 8% and 11% annually for more than a decade and the country is the fifthfastest growing economy among the 188 International Monetary Fund (IMF) member countries
As the primary focus of this paper is to analyze the impact of external debt servicing on economic growth of Ethiopia, the econometric model is specified to facilitate the test of hypothesis that whether explanatory variables cause of external debt servicing on economic growth of Ethiopia
The study shows that external debt servicing and economic growth has no uniform trend from period to period

Summary

Introduction

1 .Backgroud of the Study Ethiopia has grown at a rate between 8% and 11% annually for more than a decade and the country is the fifthfastest growing economy among the 188 International Monetary Fund (IMF) member countries. This growth has been driven by sustained progress in the agricultural and service sectors. Batool & Mehomood (2013) is studdied about impact of external debt servicing on per capita income growth rate in the case of Pakistan economy. Apart from the previous research works, this research is study about the impact of external debt servicing on economic growth in the case of Ethiopian economy

Methods

Results

Conclusion