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Public Debt and It’s Implication on Kenya’s Future Economic Growth

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  • Pollyne Mbithe Mutunga

    (Machakos University, Machakos, Kenya)

Abstract

An upsurge of Kenya’s public debt has elicited public debate on whether these crises could affect the future generation. Thus, the study adopted VAR model using data from 1980 to 2019 to investigate the effect of public debt on the future generation. To do this, the study utilized the historical data for GDP (dependent) and Public debt (independent variable) to estimate GDP for the years 2020, 2021, and 2022. Results reveal that public debt could slow down Kenya’s economic growth for the next three years. It was recommended that the country need debt restructuring to free up some financial resources and enhance investment in productive sectors as a mitigation measure.

Suggested Citation

  • Pollyne Mbithe Mutunga, 2020. "Public Debt and It’s Implication on Kenya’s Future Economic Growth," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 4(8), pages 218-223, August.
    • Handle: RePEc:bcp:journl:v:4:y:2020:i:8:p:218-223
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    References listed on IDEAS

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    3. Marcellino, Massimiliano & Stock, James H. & Watson, Mark W., 2006. "A comparison of direct and iterated multistep AR methods for forecasting macroeconomic time series," Journal of Econometrics, Elsevier, vol. 135(1-2), pages 499-526.
    4. Maureen Were, 2001. "The Impact of External Debt on Economic Growth in Kenya: An Empirical Assessment," WIDER Working Paper Series DP2001-116, World Institute for Development Economic Research (UNU-WIDER).
    5. Adel M. EL-MAHDY & Neveen M. TORAYEH, 2009. "Debt Sustainabiliy And Economic Growth In Egypt," International Journal of Applied Econometrics and Quantitative Studies, Euro-American Association of Economic Development, vol. 9(1).
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