Measuring and analyzing the impact of financial depth on economic growth in Iraq for the period 2004-2023

Abstract

Financial depth plays a fundamental role in influencing economic growth through the development of the banking sector, as the development of the financial sector leads to the activation of the real sector. Therefore, the research aims to measure, analyze and quantify the impact of financial depth on economic growth in Iraq using the ARDL model for the period 2004-2023. The research results concluded that there is a negative relationship between financial depth indicators and GDP in the short and long term due to the weak role of the banking sector as a result of individuals’ lack of confidence in dealing with banks. Finally, the research recommends the necessity of the Central Bank adopting policies through which individuals’ confidence in banks is increased and the provision of better financial services to the public.