Topics in Middle Eastern and North African Economies

Document Type

Article

Publication Date

9-1-2022

Abstract

The increased level of debt is a major risk for the financial stability and questions the ability of countries to balance fiscal vulnerabilities with development goals. With the rising debt wave and additional pressures induced by the pandemic and the Russian/Ukrainian war on sources of development finance, this study uses a panel quantile regression to re-examine the asymmetric relationship between the external debt and economic growth in six highly indebted MENA countries, namely, Bahrain, Egypt, Jordan, Lebanon, Morocco and Tunisia over the period 2006-2019. The outcomes support the main hypothesis that high debt reduces economic growth, yet this effect seems not to be homogeneous across the various quantile levels. Currently, the global macroeconomic conditions and Russia’s war with Ukraine add another layer of complexity to the high external indebtedness and will likely affect these countries’ ability to refinance their foreign currency-denominated debt, threatening to overwhelm these economies.

Journal Title

Topics in Middle Eastern and North African Economies

ISSN

2334-282X

Publisher

Middle East Economic Association and Loyola University Chicago

Volume

24

Issue

2

Comments

Presentation of the articles in the Topics in Middle Eastern and North African Economies was made possible by a limited license granted to Loyola University Chicago and Middle East Economics Association from the authors who have retained all copyrights in the articles.

Creative Commons License

Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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