A group of low-income countries classified as HIPCs have continued tornexperience difficulties in managing and servicing their huge stocks of externalrndebt. Most of these countries including Ethiopia are in sub-Saharan Africa. Thernrelatively high level of Ethiopia's external indebtedness and rising debt burdenrnhas serious implications on the country's development and debt sustainabilityrninitiatives. While the economic performance continue to deteriorate, there havernbeen significant net outflow of resources to meet the debt obligations.rnrnTile study pin downs vital role of the emerging field of external debt and debtrnindicators in the Ethiopian economy with emphasis on empirical relationship ofrnexternal debt and economic growth over the period 1963/64-2003/04. In doingrnso, this paper examines the magnitude and structure of the country's externalrndebt, and its impact on economic growth across its three economic regimes.rnUsing time series data for the same period, the empirical results indicated thatrnpast external debt accumulation has a negative impact on economic growth.rnDebt servicing also appears to affect economic growth adversely.rnrnSeveral policy implications emerge from the study. The simultaneousrnattainment of sustainable levels of economic growth and external debt appearrndifficult at the moment and could remain elusive if aggressive measures are notrnundertaken. The results obtained from this study support the need for Ethiopiarnto be considered for comprehensive debt relief measures. In addition, creatingrncredibility including political will to reforms is required to spur investorrnconfidence for both local and foreign investments.