Growing External Debt and Declining Export: The Concurrent Impediments in Economic Growth among South Asian Countries

Abstract

The existing study has been conducted by checking the growing external debts and economic growth among the South Asian countries. The data in the study was collected every month from 2008 to 2018. Pakistani, India, Bangladesh, Sri Lanka, Nepal & Bhutan were included in the study. Due to the data limitation, Afghanistan and Maldives have been excluded from the study. Due to the panel nature, the study has used the ARDL approach on Mean Group (MG) and Pooled Mean Group (PMG) techniques. Findings of the co-integration test show that the variables have been found significant and rejecting null hypotheses of no long-run relationship. The results support that the factors were found harmonious relationship and also reject the statement of being non-convergent. The findings of the model show that external debt is having a negative relationship with economic growth in the case of South Asian countries both in the case of short-run and longrun relationship in the MG technique. The PMG technique reported positive relationships in the short run and long run but the relationship has been found insignificant in the short-run and significant in a long-run relationship.