Determinants of Government Debt in ASEAN-5 Nations: An ARDL Analysis of Economic Factors
In the context of the global health crisis and economic downturn, ASEAN nations experienced a significant rise in public debt, highlighting the need to examine key economic determinants for sustainable debt management. This study investigates the impact of budget balance, real interest rate, curren...
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| Format: | Article |
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Qubahan
2025-01-01
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| Series: | Qubahan Academic Journal |
| Online Access: | https://journal.qubahan.com/index.php/qaj/article/view/1119 |
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| author | Mohammad Helmi bin Hidthiir Zaki Ahmad Lee Kai Lun Mustazar Mansur Ayman Abdalla Mohammed Abubakr Mastora Sahal Gomaa Sahal |
| author_facet | Mohammad Helmi bin Hidthiir Zaki Ahmad Lee Kai Lun Mustazar Mansur Ayman Abdalla Mohammed Abubakr Mastora Sahal Gomaa Sahal |
| author_sort | Mohammad Helmi bin Hidthiir |
| collection | DOAJ |
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In the context of the global health crisis and economic downturn, ASEAN nations experienced a significant rise in public debt, highlighting the need to examine key economic determinants for sustainable debt management. This study investigates the impact of budget balance, real interest rate, current account balance, and GDP growth on public debt in ASEAN-5 countries (Indonesia, Malaysia, the Philippines, Singapore, and Thailand) from 1990 to 2021. Using the ARDL model, the findings suggest that, except for Indonesia and Singapore, budget balance has a negative correlation with public debt in both the short and long run, while real interest rates exhibit a significant positive long-run relationship across all countries. The current account balance shows a significant positive relationship with public debt in Indonesia and the Philippines, whereas GDP growth reveals a positive long-run impact only in Singapore, with other countries showing a negative impact. In the short run, budget balance and interest rates have more immediate effects, while GDP growth and current account balances show delayed impacts, becoming more significant in the long run. Policy implications suggest that maintaining budget discipline and managing interest rates are key strategies for controlling debt, though country-specific approaches are necessary given the mixed effects of GDP growth and current account balances. The study acknowledges limitations such as data gaps and the exclusion of variables like inflation and exchange rates, which may affect the generalizability of the results across different economic conditions.
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| format | Article |
| id | doaj-art-0d00ddd9be9d4e1e86a825fa88d00500 |
| institution | Kabale University |
| issn | 2709-8206 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | Qubahan |
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| series | Qubahan Academic Journal |
| spelling | doaj-art-0d00ddd9be9d4e1e86a825fa88d005002025-02-03T10:11:21ZengQubahanQubahan Academic Journal2709-82062025-01-014410.48161/qaj.v4n4a11191119Determinants of Government Debt in ASEAN-5 Nations: An ARDL Analysis of Economic Factors Mohammad Helmi bin Hidthiir 0Zaki Ahmad1Lee Kai Lun2Mustazar Mansur 3Ayman Abdalla Mohammed Abubakr4Mastora Sahal Gomaa Sahal 5School of Economics, Finance and Banking, Universiti Utara Malaysia, Sintok 06010, Kedah, Malaysia;School of Economics, Finance and Banking, Universiti Utara Malaysia, Sintok 06010, Kedah, Malaysia;School of Economics, Finance and Banking, Universiti Utara Malaysia, Sintok 06010, Kedah, Malaysia;Faculty of Economics & Management, National University of Malaysia, 43600 Bangi, Selangor, Malaysia; Department of Financial Management, Academic Programs for Military Colleges, Abu Dhabi University, Abu Dhabi 12406, UAE;Department of Financial Management, Academic Programs for Military Colleges, Abu Dhabi University, Abu Dhabi 12406, UAE; In the context of the global health crisis and economic downturn, ASEAN nations experienced a significant rise in public debt, highlighting the need to examine key economic determinants for sustainable debt management. This study investigates the impact of budget balance, real interest rate, current account balance, and GDP growth on public debt in ASEAN-5 countries (Indonesia, Malaysia, the Philippines, Singapore, and Thailand) from 1990 to 2021. Using the ARDL model, the findings suggest that, except for Indonesia and Singapore, budget balance has a negative correlation with public debt in both the short and long run, while real interest rates exhibit a significant positive long-run relationship across all countries. The current account balance shows a significant positive relationship with public debt in Indonesia and the Philippines, whereas GDP growth reveals a positive long-run impact only in Singapore, with other countries showing a negative impact. In the short run, budget balance and interest rates have more immediate effects, while GDP growth and current account balances show delayed impacts, becoming more significant in the long run. Policy implications suggest that maintaining budget discipline and managing interest rates are key strategies for controlling debt, though country-specific approaches are necessary given the mixed effects of GDP growth and current account balances. The study acknowledges limitations such as data gaps and the exclusion of variables like inflation and exchange rates, which may affect the generalizability of the results across different economic conditions. https://journal.qubahan.com/index.php/qaj/article/view/1119 |
| spellingShingle | Mohammad Helmi bin Hidthiir Zaki Ahmad Lee Kai Lun Mustazar Mansur Ayman Abdalla Mohammed Abubakr Mastora Sahal Gomaa Sahal Determinants of Government Debt in ASEAN-5 Nations: An ARDL Analysis of Economic Factors Qubahan Academic Journal |
| title | Determinants of Government Debt in ASEAN-5 Nations: An ARDL Analysis of Economic Factors |
| title_full | Determinants of Government Debt in ASEAN-5 Nations: An ARDL Analysis of Economic Factors |
| title_fullStr | Determinants of Government Debt in ASEAN-5 Nations: An ARDL Analysis of Economic Factors |
| title_full_unstemmed | Determinants of Government Debt in ASEAN-5 Nations: An ARDL Analysis of Economic Factors |
| title_short | Determinants of Government Debt in ASEAN-5 Nations: An ARDL Analysis of Economic Factors |
| title_sort | determinants of government debt in asean 5 nations an ardl analysis of economic factors |
| url | https://journal.qubahan.com/index.php/qaj/article/view/1119 |
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