Department of Economics, National University of Sciences and Technology, Islamabad, Pakistan.
PLoS One. 2022 Sep 28;17(9):e0275266. doi: 10.1371/journal.pone.0275266. eCollection 2022.
An assessment of debt dynamics and its sustainability is very important in formalizing prudent and effective macroeconomic policies especially for the economies with weak macroeconomic fundamentals and alarming debt levels. Keeping in view the recent debt escalation in Pakistan, this study aims to explore the important factors that influence the public debt dynamics in case of Pakistan and to evaluate its sustainability. This study applies the debt dynamic approach for empirical assessment of drivers of changing debt levels and analysis of public debt sustainability. Furthermore, ARDL approach is utilized to study the short- and long-run debt dynamics using historic data from 1975 to 2021. This study is distinct from already existing work on debt assessment in Pakistan as it examines both important dimensions of public debt (determinants & stability) by employing the novel dynamic debt modelling approach and using most recent data. The study finds a positive and significant impact of fiscal deficit, exchange rate depreciation and interest rate on public debt in Pakistan. The debt sustainability analysis also reveals the instability of public debt for the entire study period except for few years. The regression results corroborate with the findings from stability analysis, and the main driving forces for increasing the debt burden of the country are found to be the fiscal indiscipline along with the rising cost on account of ER depreciation and higher interest rates.
对债务动态及其可持续性进行评估在制定审慎有效的宏观经济政策方面非常重要，特别是对于那些宏观经济基础薄弱且债务水平令人担忧的经济体。考虑到巴基斯坦最近的债务升级，本研究旨在探讨影响巴基斯坦公共债务动态的重要因素，并评估其可持续性。本研究采用债务动态方法对不断变化的债务水平的驱动因素进行实证评估，并分析公共债务的可持续性。此外，利用 ARDL 方法利用 1975 年至 2021 年的历史数据研究短期和长期债务动态。本研究与巴基斯坦已经存在的债务评估工作不同，因为它通过采用新颖的动态债务建模方法并使用最新数据来考察公共债务的两个重要方面（决定因素和稳定性）。该研究发现，财政赤字、汇率贬值和利率对巴基斯坦公共债务都有正向且显著的影响。债务可持续性分析还表明，除了少数几年外，整个研究期间公共债务的稳定性都很差。回归结果与稳定性分析的结果相符，导致国家债务负担增加的主要驱动因素是财政无纪律以及由于 ER 贬值和更高利率导致的成本上升。
