THE RELATIONSHIP BETWEEN EXTERNAL DEBT, INTERNAL DEBT AND ECONOMIC GROWTH: AN EMPIRICAL ANALYSIS ON BRICS-TM COUNTRIES

Private sector deficit, budget deficit and current account deficit can be counted among the main reasons for external and internal borrowing. In reducing the developmental differences of countries, governments can intervene in the market by borrowing. Therefore, it is important to investigate the existence of external and internal borrowing in the BRICS-TM countries, which have high growth rates. The aim of this study is to investigate the relationship between external and internal debts and economic growth in the BRICS-TM countries by data from the period 2000-2016. For the empirical analysis of the research, panel data analysis method is used. According to the findings obtained from the analysis, no co-integration and causality relationship are found between external and internal debts and economic growth. These results indicate that the high growth rates do not supported by the external and internal debts in the BRICS-TM countries.