ARDL Framework for Analyzing the Impact of Financial Inclusion on Economic Growth in Iraq

The purpose of this study is to examine the connection between Iraq's economic growth and financial inclusion from 2008 to 2022. To find both short- and long-term associations between the variables used in this research, unit root tests, error correction models, and cointegration approaches are employed. Overall, the empirical findings suggest that a substantial portion of the rise in economic growth is attributed to the banking sector. According to the study, there was a negative correlation between Iraq's GDP growth throughout the study period and the variables of banking density and Banking spread, which represent aspects of financial inclusion. This is primarily due to a lack of sound banking planning that focused on growing the bank branch network and distributing its services throughout the nation's largest geographic area. This had a detrimental effect on the ability to offer these banking services to as many people as possible. The high level of public and private sector confidence in the banking system was reflected in the positive correlation between long-term economic growth and the variables of loans and deposits, which indicate the dimensions of financial inclusion. This suggests that the utilization of these banking and financial services enhances the banking industry's contribution to stimulating economic activity, which in turn fosters economic growth.