THE IMPACT OF THE EXTERNAL DEBT TO THE ECONOMIC GROWTH.

External debt is one of the key indicators on the economic growth of a country. However, the underestimation of the risks and unefficient use of received funds resulted on the default of some countries. Lately, Greece, Spain and Portugal faced default due to challenges on paying back the external debt. The purpose of the study is to determine the structure of external debt in Azerbaijan and calculate it by interest rates to assess main economic indicators, such as, the volume of GDP, the income and expenses of the state budget, social inequality, employment and poverty indicators. As an oil rich country, there is a difference on the impact of external debt to the oil and non-oil sector. Thus, the growth of oil sector through external debt is conducted by the international contracts. The research was conducted by conducting statistical, competitive analysis and running econometrical models. According to the research results, external debt does not impact the economic growth all the time. For this, the goals of the external debt, its allocation and control have to respond to international standards. The oil prices of the world market, in addition, the ratio of national currency against the foreign currency, including U.S. dollar has an impact on the borrowed or paid external debt. The competitive economic environment in the country should be maintained and improved for the growth of the national economy. The innovativeness of the research is that the structure of the external debt has been calculated by the interest rates and economic indicators were assesed by diversification. [ABSTRACT FROM AUTHOR]