Fiscal Sustainability and Its Implications for Economic Growth in Egypt: An Empirical Analysis
Bayan Mohamad Alshaib,
Abdullah Al khatib,
Alina Cristina Nuta,
Mohamad Hamra,
Pradeep Mishra,
Rajani Gautam,
Sarfraz Hussain and
Cristina Gabriela Zamfir
SAGE Open, 2023, vol. 13, issue 4, 21582440231215983
Abstract:
This study examines the association between fiscal sustainability indicators and Egypt’s economic growth from 1980 to 2018. Fiscal sustainability refers to a government’s ability to generate sufficient revenue to cover its costs and debt obligations in the long run without excessive borrowing or money creation. Egypt’s economic growth has slowed, raising questions about fiscal sustainability. This study aimed to analyze the dynamic relationship between fiscal sustainability indicators (government revenue, expenditure, external debt) and economic growth in Egypt. The autoregressive distributed lag (ARDL) bounds testing approach and unrestricted error correction model were applied to annual data from 1980 to 2018. A dynamic link was found between fiscal sustainability indicators and economic growth. Government expenditure and external debt significantly impacted economic expansion in the long term, while government revenue did not. Fiscal sustainability, measured by growth in total government expenses, external debt obligations, and revenue, significantly influences Egypt’s economic growth. Prudent fiscal management is crucial for sustained economic development. Policymakers should focus on controlling government spending, limiting external debt, and improving revenue generation to promote long-term economic growth in Egypt. Fiscal sustainability must balance critical investments in public services. Carefully managing fiscal deficits is key to unleashing Egypt’s economic potential. This study provides valuable insights into the connection between fiscal policy and economic growth in Egypt, informing policymakers’ decisions.
Keywords: fiscal sustainability; fiscal sustainability indicators; economic growth; ARDL bounds test (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)
Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/21582440231215983 (text/html)
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:sae:sagope:v:13:y:2023:i:4:p:21582440231215983
DOI: 10.1177/21582440231215983
Access Statistics for this article
More articles in SAGE Open
Bibliographic data for series maintained by SAGE Publications ().