An assessment of debt sustainability in scenario of Pakistan’s debt burden

Khurram Ejaz and Attiya Javid

MPRA Paper from University Library of Munich, Germany

Abstract: The objective of the study is to assess and analyze sustainability of overall public debt and sustainability of external debt of Pakistan using the debt dynamic equation for the period 1971-2008. The study has analyzed public debt sustainability through interest rate and growth rate differential and level of primary budget balance while external debt sustainability is assessed through interest rate on debt and growth rate of exports differential and current account balance. The results of the study indicate that primary budget deficit and current account deficit have played major role in accumulation of public debt and external debt of Pakistan respectively. The study concludes that public debt and external debt of Pakistan is sustainable in few years and unsustainable in many unsustainable.

Keywords: Public debt; External Debt; Sustainability; Debt dynamic equation; Primary budget deficit; current account balance (search for similar items in EconPapers)
JEL-codes: A1 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-cwa
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:37563

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