Impact of Financial Inclusion and Trade on Economic Growth in Pakistan: A Comprehensive Analysis

Abstract

The financial inclusion system is always bringing social and economic changes in countries. Economic growth can have many beginning but the current studies focuses on financial inclusion as the main source of economic growth. It is encouraging to observe the further connection between financial inclusion and trade in promoting economic growth. In this research we calculate the effect of financial inclusion by using its proxy Automated Teller machine (ATM) as it represents the system that allows the individual to access finance and engage with the economy. This research also evaluates how Trade interacts with the economic growth.

This research improves earlier studies by focusing specifically on Pakistan and using a longer time period. This study uses data from 2004 to 2024, which provides a more detailed and complete understanding of the relationship between financial inclusion, trade, and economic growth in Pakistan. This study aims to achieve the following objectives. To explore the causal association between FI, trade, and economic growth in Pakistan. To investigate the impact of financial inclusion (ATM) on economic growth. To evaluate the impact of trade on economic growth. Data and Methodology helps explain how this research is conducted. NEWEY-WEST approach and VIF (Variance Inflation Factor) are applied to time series data in order to select appropriate time series econometric techniques for analysis. Results found a strong, significant, and positive association linking financial inclusion and trade with economic growth.