The impact of financial deepening on Iraqi economic growth for the period (2004-2021): an analytical study

Abstract

The study aimed to track the impact of the financial deepening on the economic growth of Iraq for the period (2004-2021), as the Iraqi economy has witnessed great transformations, perhaps the most important of which is the liberation of the Iraqi banking sector, and the transformation of the Iraqi economy from the planned economy to the market economy after 2003, and the subsequent problems in the economy In addition to the changes in the Iraqi market for securities and its integration with developments in the global financial markets, the problem of the study lies in the decline in financial deepening in Iraq, which was reflected on the role of the banking sector in raising the rate of economic growth. The study relied on the Autoregressive Distributed Slow Periods (ARDL) model for quarterly data to show the effect of the explanatory variables represented by (liquidity ratio, credit granted to the private sector, net interest rate margin, trading volume, stock turnover rate) on the dependent variable expressed in the output The local total at constant prices, and tests were done by Eviews10 program, and the results of the unit root test showed that the time series in most of them stabilized when taking the first difference and the level The stability within the permissible limits, and that there is a long-term equilibrium relationship between financial deepening and economic growth, and the study found that the indicator (trading volume, stock turnover rate, and net interest rate margin) has a negative impact, while the indicator (liquidity ratio, credit granted to the sector) private) has a positive effect.