The impact of external public debt on economic growth: an economic study: the case of Morocco

Amine Leghrari (), Chakib Jerry and Mounir Jerry
Additional contact information
Amine Leghrari: Ph,D Student in Economic and Management, Departement of Economic and Management, Laboratory: Economic Sciences and Public Policy, Faculty of Economic and Management, Ibn Tofail University, Morocco
Chakib Jerry: Professor of Mathematics and Statistics at the Faculty of Juridical, Economic and Social Sciences, University of Moulay Ismail, Morocco, Departement of Economic and Management, Laboratory: Economic Sciences and Public Policy, Faculty of Economic and Management, Ibn Tofail University, Morocco
Mounir Jerry: Professor of Mathematics and Statistics at the Faculty of Economics and management, University of Ibn Tofail, Morocco, Departement of Economic and Management, Laboratory: Economic Sciences and Public Policy, Faculty of Economic and Management, Ibn Tofail University, Morocco

Post-Print from HAL

Abstract: This study examines the impact of external public debt on Morocco's economic growth from 1998 to 2022, using gross domestic product (GDP) as the dependent variable. Key explanatory variables include external public debt, gross national savings, external public debt service, and the investment rate. Employing annual time series data, the study adopts advanced econometric techniques such as the Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) tests to assess stationarity, Johansen cointegration to identify long-run relationships, and the Vector Error Correction Model (VECM) to analyze both short-and long-term dynamics. The results show a significant long-run equilibrium relationship between the variables. External public debt and debt servicing negatively affect GDP, highlighting their detrimental impact on Morocco's economy. Conversely, gross national savings and the investment rate show potential for positive growth contributions. These findings align with global evidence and emphasize the critical need for effective external debt management. To enhance growth, policymakers should focus on optimizing debt allocation toward productive investments, diversifying exports to bolster foreign exchange reserves, and encouraging domestic savings to reduce external borrowing reliance. This study provides valuable insights into debt sustainability challenges and contributes to the discourse on public finance strategies for developing economies like Morocco.

Keywords: Economic Growth Gross Domestic Product External Debt Public External Debt Public Service VECM Johansen Cointegration approach Morocco; Economic Growth; Gross Domestic Product; External Debt Public; External Debt Public Service; VECM; Johansen Cointegration approach; Morocco (search for similar items in EconPapers)
Date: 2025-01
Note: View the original document on HAL open archive server: https://hal.science/hal-05021290v1
References: Add references at CitEc
Citations:

Published in Journal of Economics and Sustainable Development, 2025, 16 (1), pp.26-40. ⟨10.7176/JESD/16-1-03⟩

Downloads: (external link)
https://hal.science/hal-05021290v1/document (application/pdf)

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:hal:journl:hal-05021290

DOI: 10.7176/JESD/16-1-03

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().