Effective Factors on Budget Deficit in SAARC Member Countries during the Period 2000-2016

This study provides an empirical examination of the macroeconomic factors influencing budget deficits in the member states of the South Asian Association for Regional Cooperation (SAARC) during the period 2000–2016. Fiscal imbalance has been a persistent feature of the region’s economic landscape, shaped by structural revenue constraints, rising public expenditures, and exposure to macroeconomic volatility. Using secondary data from the World Bank and the International Monetary Fund, the research applies quantitative methods—specifically an Ordinary Least Squares (OLS) framework—to analyze how economic growth and inflation contribute to variations in fiscal deficits across SAARC economies. The analysis demonstrates that economic growth plays a stabilizing role by strengthening domestic revenue capacity and reducing reliance on deficit financing. In contrast, inflation is found to exacerbate fiscal imbalance by increasing the cost of government operations and weakening budgetary discipline. These findings highlight the importance of growth-oriented development strategies and consistent price-stability measures as essential components of fiscal management in developing regions. The study offers one of the few comparative assessments of budget deficits within SAARC, contributing evidence that can support more informed fiscal and macroeconomic policymaking.