Abstract:

Today, external debt is an important source of finance for economic growth, which is the desire of underdeveloped and developing countries. Insufficient export revenues cause less developed and developing countries to resort to foreign debt more frequently due to the demand for foreign currency. There are many domestic and foreign studies on foreign debt and economic growth in the literature, but the results are inconsistent. In most of the studies, it has been concluded that there is a negative relationship between foreign debt and economic growth.In our study, the relationship between foreign debt interest payments and growth between the years 2005-2021 was investigated, but when we look at the literature, the effect of foreign debt on growth was mainly investigated. As a result of the causality analysis, a one-way relationship was reached from growth to foreign debt interest payments. As a result of the impulse response analysis, it was concluded that the response of foreign debt interest payments to the change in economic growth decreased, and the response of economic growth to foreign debt interest payments decreased.

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