Foreign
debt is considered to be a source of income for countries. If foreign debt is
managed well and directed towards productive projects, then it might enhance
the countries’ economic growth. However, foreign debt has many costs that might
cause deterioration in the economy. This study aims to investigate how total
foreign debt impacts the economic growth of Egypt for a time period of 39 years
(1980-2018). In the methodology, descriptive statistics, unit root tests,
Johansen co-integration and Vector Error Correction Model (VECM) are used. The
results show that total foreign debt exerts a significant long run negative
impact on the Egyptian economic growth, while the results are insignificant in
the short run.
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