Sustainability, Policy, and Global Impact: A Comparative Analysis

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DOI :10.26650/B/SS10ET27.2024.008.02   IUP :10.26650/B/SS10ET27.2024.008.02    Full Text (PDF)

Public Debt: Global Trends, Growth Trend, Risks, Prospects and Azerbaijan’s Public Debt Management Experience

Fail Kazımov

Analyzing the threats, prospects and advantages for the economy caused by the internal and external debt of the state is very relevant in the modern era. In recent years, state borrowing has penetrated the economies of all countries as an actual economic trend. Due to the significant contraction in the world economy in the context of the COVID-19 pandemic, the relevance of public debt and its share in the gross domestic product (GDP) of countries has increased at an alarming level. Expansionary fiscal policies due to fiscal deficits have led to a sharp increase in public debt levels around the world.

Along with the increase in the interest rate of public debt in GDP, the number of reasons that create public debt is also increasing worldwide. The issue that attracts attention is that rich and poor countries suffer from public debt.

Modern public debt has become more of a political mechanism than an economic process. Nuances such as the fact that foreign debts have reached an unmanageable level in many countries and the inability of some countries to pay debts have increased both the number of researchers and the number of applications to this topic by individual financial institutions. All such nuances make the topic even more relevant and make it necessary to analyze the current picture of public debt in the world from a different perspective, to examine the seriousness of the high risks and threats that debt can create.

Taking into account the above, the following goals were set and analyzed in the research work:

  • At the global level, the macroeconomic advantages of public debt, its efficiency and the risks created were analyzed, comparisons were made based on the databases and statistical data of international organizations, and the positive and negative effects of the relationship between public debt and GDP were considered.
  • The growth trend of public debt in the last 100 years was reviewed and growth dynamics and different effects on economies were investigated.
  • The borrowing strategy and specific characteristics of developed countries, developing countries and countries rich in natural resources were analyzed comparatively.
  • The current state of Azerbaijan›s public debt has been analyzed.
  • The economic problems and perspectives that the current level of Azerbaijan›s public debt may create have been examined.
  • The weaknesses and strengths of Azerbaijan›s public debt management strategy have been analyzed. The research paper consists of two parts, covering research on the world and Azerbaijan related to public debt.

Keywords: GDP, Economic Growth, Public Debt, Foreign Debt, Domestic Debt

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