Debt financing is considered an important factor for development, especially for countries that suffer from insufficient domestic financing resources. Many low-income countries have relied on external loans as part of their structural reforms to achieve development and enhancing the standard of living of their citizens. Despite the importance of debt to finance infrastructure projects and investment in human capital as a basis for the development process, the increase in external debt has perform a burden on these countries as debt and its services have become an obstacle in their path to economic growth and development. In this context, the study aims to analyze the impact of external debt on economic growth in low- and middle-income countries during the period 1970-2021 using the FEM fixed effects model and relying on cross-sectional time series data (Panel Data) for a sample of 96 low- and middle-income developing countries from different regions. The results indicated a negative impact of external debt on economic growth in low- and middle-income countries. Comparing income groups, the negative impact was found to be greater in upper-middle-income countries, followed by low-income countries and finally lower-middle income countries. Regarding the effects of external debt on the Egyptian economy, the study found that the effect of external debt on economic growth in Egypt is negative similar to low- and middle-income countries, but this is conditional on taking into account free market trends that begins in 1990s. However, if socialist tendencies starting in the 1970s are considered, we find a significant difference in the relationship between Egypt and the rest of the low- and middle-income countries, as the impact on Egypt turns from negative to positive.