ABSTRACT
In recent decades, the OIC countries have experienced substantial variations in external debt levels, frequently driven by global economic trends and regional conflicts. These countries have traditionally financed their development projects through external debt, often facing difficulties in achieving long-term economic expansion. The increasing debt load has had a mixed influence on economic performance, with some nations benefiting from foreign investment, while others face rising debt repayment costs that constrain growth. This research examines the relationship between external debt obligations and economic growth across 34 OIC member countries, utilizing panel data methodology for 1999-2023. The findings indicate a substantial economic downturn associated with external debt, highlighting the importance of well-designed debt management plans. On the other hand, foreign direct investment (FDI) and exports have a significant positive impact, underscoring their crucial roles in driving economic performance. Lagged GDP per capita data indicate a significant positive correlation, suggesting that economic growth follows a longterm trajectory. In this context, unemployment and inflation do not have a significant effect on growth. The significance of policies aimed at decreasing debt loads, promoting investment, and boosting export competitiveness is underscored by these findings, highlighting their role in achieving sustainable development in OIC member countries.