Public Debt and Economic Growth in Nepal

Authors

  • Pratibha Shrestha Lecturer, Kabhre Multiple Campus

DOI:

https://doi.org/10.3126/kjour.v5i1.53317

Keywords:

Internal debt, External debt, real GDP, Unit root test, cointegration, Ordinary least squares

Abstract

In case of increasing both internal and external debts in Nepal, this paper investigates the impact of internal and external outstanding debt along with gross fixed capital formation, broad money supply, total trade and national consumer price index on real GDP of Nepal for the period 1975 to 2021. The study applied domestic data sets with ordinary least square series. Unit root and cointegration tests are carried out. The cointegration results confirm long run relationship. The empirical results show that both the internal and external outstanding debts are contributing to real GDP in Nepal. The results are supported by econometric diagnostic tests. Based on the results, the paper recommends that taking public debt and investing in public sector is beneficial for real sector output in Nepal.

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Published

2023-03-17

How to Cite

Shrestha, P. (2023). Public Debt and Economic Growth in Nepal. Khwopa Journal, 5(1), 25–36. https://doi.org/10.3126/kjour.v5i1.53317

Issue

Vol. 5 (2023)

Section

Articles

License

Copyright (c) 2023 Authors and Khwopa College

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