Abstract:
This study of the impact of external debt in economy growth in Rwanda from 2010 up to 2022. The study was to establish the long run and short run relationship between Real Gross Domestic Product and economic growth. I exploited secondary data with different variables such as GDP (gross domestic product), ED (external debt), M2 (money supply), PG (population growth and Remittance which was gotten from World Bank, website and analyzed by myself with Eviews7 and Eveiws10 software. The method used within this
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study is least square method for presenting the graphs and computing different tests such augmented dicker fuller test, autocorrelation test, diagnosis test and stability test.
I have used different technique such as documentary, observation, interview, and methods such as quantitative and statistical methods for figure out my research and the findings reveal in long run, R-square which is statistical measure of how data are fitted in regression line.
It represents the percentage of the response variables variation that is explained by linear model value of 0.573416 which indicates that, there is a long run relationship between Real Gross Domestic Product and Economic Growth in Rwanda at 57% level of significant as R2 values at 0.573416. this means the real gross domestic product explains External Debt at 0.573416 in the long run.
In the short run R2= 0.996736 which means the Real Gross Domestic Product explained by External Debt, Population Growth, Gross Domestic Product at 99% level of significant. So this means that Real Gross Domestic Product affect the Economic Growth positively.
After analysis these findings we revealed that there is impact of external debt in economic growth as it was gotten from findings and reflect that there is positive relationship between RGDP (Real Gross Domestic) and ED (External Debt) was verified and well confirmed.
