The Impact of External Debt on Economic Growth in Algeria : An Empirical Study Using the ARDL Model During the Period 1994-2023

Abstract

This study aims to analyze the impact of external debt on economic growth in Algeria over the period )1994–2023(, employing the Autoregressive Distributed Lag (ARDL) approach. The model includes a set of control variables, namely external public debt service, public expenditure, inflation, and oil prices.
The empirical results reveal a statistically significant positive effect of external public debt on economic growth in the long run, while a negative impact is observed in the short run. Moreover, public expenditure is found to contribute positively to long-term economic growth. In the short run, both the inflation rate and oil prices exert a statistically significant positive influence on economic growth. In contrast, external public debt service does not have a statistically significant effect on economic growth during the study period