المستخلص: |
The continuous increase in public debt in Egypt has become a matter of great concern. This study aims to know if the public debt in Egypt has reached the overhang level or not, by verifying the relationship of public debt with both the economic growth rate and the inflation rate in Egypt during the period from the end of June 2010 until the end of June 2020. The study revealed the applicability of the debt “Laffer” curve during the period from 2016 to 2020, which links the ratio of public debt to GDP and the real growth rate. The study also found a positive correlation between the growth rate of public debt and the inflation rate in Egypt. Therefore, the research recommended the necessity of reducing the public debt as a percentage of GDP to less than 70%, to become within the safe limits, and directing the proceeds of public loans to increase productive investments that generate enough to repay the debt and its interests, which leads to an increase in the supply of goods and services, raising growth rate and reduce the inflation rate.
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