Public debt of Nepal: It’s effect on economic growth

Abstract

Different economists have expressed different views on public debt from time to time. Different articles about public debt  and economic development also have different concepts. But there is a great need for public debt in Nepal's economic development to date. It often seems impossible to sustain economic development of Nepal with our resources. The main objective of this article is to explain the trend of public debt and economic development from 1992/93 to 2018/19. It is also to study the impact of public debt on Nepal's economic development. For this, to study the relationship between the simple linear regression model and multiple regression model has used. The regression model is constructed four equations. The conclusion of the study, R2 is more than 90% and P- value is almost zero of the entire regression model. This states that there is a positive relationship between public debt and economic development in Nepal. Despite such positive relations, our growth rate has not been uniform and public debt has been steadily increasing. But even today, Nepal's economic development needs internal and external debt. The main task today is to properly manage public debt for the economic growth of Nepal in coming days.