Title: Fiscal sustainability, economic resilience, and global connectivity: consequences of short-term policies

Authors: Muhammad Ayub Khan Mehar

Addresses: Department of Economics and Finance, Iqra University Business School, Karachi, 75290, Pakistan

Abstract: This study examines the subsequent effects of short-term policy measures aimed at mitigating the impact of immediate crises. It assumes that repayment and interest costs of the unintended outstanding debt damage the fiscal sustainability and economic growth of a country. The study primarily focuses on economic growth, fiscal sustainability, and global connectivity. Its main focus is the effects of domestic credit and external financing on the value of firms, gross domestic product (GDP) growth, and global connectivity through the departure of tourists. The study is based on 14 years of data from 152 countries. Based on a simultaneous equation system, the negative impacts of taxes and devaluation of domestic currencies on international travelling have been ascertained. It is an important conclusion that expansions in domestic credit and external debt enhance the market value of equities (shareholders' wealth). However, the domestic credit affects GDP growth negatively.

Keywords: departure of tourists; domestic credit; external debt; foreign direct investment; shareholders' wealth; global manufacturing.

DOI: 10.1504/IJLEG.2026.154440

International Journal of Logistics Economics and Globalisation, 2026 Vol.11 No.3, pp.244 - 268

Received: 08 May 2025
Accepted: 04 Dec 2025
Published online: 29 Jun 2026 *

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