Linkages between External Debt and Trade Openness on Economic Growth: Evidence from South Asian Countries
Dr. Jamil Ahmad1, Abukasim2Abstract : The research examines the relationship between external debt, trade openness and economic growth using the panel ordinary least square (POLS), fixed effect, and ARDL methods from period 1997 to 2021 for South Asian countries. The analysis result points out the negative impact of external debt on economic growth whereas; gross capital formation and trade openness have favourable influence on economic growth. Despite high borrowing rates, enhanced trade policies and improved institutional quality can help mitigate the negative effect of external borrowing on GDP Growth. Thus, the research provides a foundation for policymakers and government officials to make a strategy to increase economic development while decreasing the country's external debt.