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

Author

Listed:
  • Ejaz, Khurram
  • Javid, Attiya Yasmin

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.

Suggested Citation

  • Ejaz, Khurram & Javid, Attiya Yasmin, 2011. "An assessment of debt sustainability in scenario of Pakistan’s debt burden," MPRA Paper 37563, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:37563
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    File URL: https://mpra.ub.uni-muenchen.de/37563/1/MPRA_paper_37563.pdf
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    References listed on IDEAS

    as
    1. Sabina Khurram Jafri, 2008. "External Debt Sustainability Analysis for Pakistan: Outlook for the Medium Term," SBP Working Paper Series 27, State Bank of Pakistan, Research Department.
    2. Claudio M. LOSER, 2004. "External Debt Sustainability: Guidelines For Low- And Middle-Income Countries," G-24 Discussion Papers 26, United Nations Conference on Trade and Development.
    3. Mohammad Aslam Chaudhary & Shahid Waseem Anjum, 1996. "Macroeconomic Policies and Management of Debt, Deficit, and Inflation in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 35(4), pages 773-786.
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    Cited by:

    1. Shruti SHASTRI & A.K. GIRI & Geetilaxmi MOHAPATRA, 2017. "An empirical assessment of fiscal sustainability for selected South Asian economies," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(610), S), pages 163-178, Spring.
    2. ALEME, Timkete, 2019. "An Econometric Analysis Of Determinants Of Debt Sustainability In Ethiopia," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 23(1), pages 39-55, March.
    3. Shruti SHASTRI & A.K. GIRI & Geetilaxmi MOHAPATRA, 2017. "An empirical assessment of fiscal sustainability for selected South Asian economies," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(610), S), pages 163-178, Spring.

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    More about this item

    Keywords

    Public debt; External Debt; Sustainability; Debt dynamic equation; Primary budget deficit; current account balance;
    All these keywords.

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics

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