Does Sovereign Debt Contribute to Long-term Growth in Thailand?

Abstract

          The aim of this research is to explore the impact of sovereign debt and debt services on the long-term economic growth of Thailand including other considered macroeconomic factors: gross capital formation, consumer price index, inflation, and trade by using time series data. The study uses annual data from 1990 to 2010. The study evaluates the relationship between external debts, debt services, and other considered variables. Results show that external debt has an impact on the economic growth of Thailand. Consumer price indexes have positively impacted economic growth, while gross capital formations and trade balances have a positive impact. The result of this study suggests that even the borrowing level does not impact economic growth, its obligation or debt service still threaten the growth of the economy.