DEBT SUSTAINABILIY AND ECONOMIC GROWTH IN EGYPT

Abstract

The persistence growth of Egypt's public domestic debt has raised concerns regarding its impact on economic growth and fears are being express about the debt sustainability. Utilizing data for the period 1981-2006, the results obtained from cointegration model reveal that the public domestic debt in Egypt has a robust negative impact on growth. The sustainability of debt was examined used some algebra methods. The results suggested that the recent path of debt followed in Egypt was sustainable. For debt to remain sustained in future, substantial fiscal reforms are needed and policies should be adopting to maintain an increasing growth-interest rate differential.Public Domestic Debt; Fiscal Budget; Debt Sustainability; Economic Growth; Cointegration.