Pressure on Foreign Debt and Interest Rates on the Malaysian Economy, Is it True that the Money Supply Drives Economic Growth?

The study aims to investigate foreign debt, interest rates, exchange rates, and economic growth in Malaysia. This study uses secondary data sourced from the world bank with an annual research period from 2000 to 2020. This research uses The data analysis method used in this research is the causal analysis method, namely the Autoregressive Distributed Lag (ARDL). We found that external debt hinders Malaysia's economic growth, this is reinforced by a significant negative relationship both in the long and short term from interest rates which actually suppress economic growth. It is intriguing that there is a strong positive correlation between economic growth and foreign debt in the short term. While it is logical that foreign debt boosts growth temporarily, it eventually (in long term) weighs down the economy. Economic growth is driven by the strengthening of the exchange rate, but not the money supply in both the long and short term. The money supply actually only encourages economic growth in the short term but depresses the economy in the long run.