Impact of External Debt on Iraqi Economic Growth for the period (2006-2022) using the Speed of Adjustment Model.

Section: Research Paper
Published
Aug 4, 2025
Pages
91-111

Abstract

External debt is a source of financing for some developing and advanced economies, as it affects their growth rates. Iraq is one of those countries, so we are studying its impact on its economic growth for the period (2006-2022). The study aims to measure and analyze this impact by using the Speed of Adjustment Model, and by relying on a combination of the descriptive-deductive analysis methodology to diagnose the levels of development of the gross domestic product and external debt in Iraq during the selected study period, as well as using the quantitative methodology of the economic measurement method for the selected model and its tests that must be conducted.The results of the adaptation Speed of Adjustment model reach the existence of an inverse non-linear relationship between external debt and economic growth in Iraq during the selected study period, as external debt affects the GDP variable for the current year by 15.08%, in line with the study hypothesis and the Iraqi economic reality. The value of the adjustment speed according to the error correction parameter CointEq(-1) has reached 0.112524-, so the adjustment period of the GDP variable (economic growth) in Iraq will return to the equilibrium position in the long term after approximately nine years, to correct the path of economic growth in Iraq in the long term as a result of a deviation in the value of the external debt in the short term.

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