Financial development and economic growth: The case of MENA countries

Financial development is described as one of the most important elements of the economic structure.For this reason, the financial development of a country is closely related to the economic development of the country.The economic growth of a country, on the other hand, causes an increase in the average income level, improvement in legal regulations and international integration, and creates a suitable environment for the development of the financial system.The focus of the study is the MENA countries. The MENA region is struggling with a high level of volatility due to many factors such as oil price fluctuations, political instability and regional conflicts. The study will examine the causal relationship between financial development and economic growth for MENA countries.The economic and financial development data of MENA countries between 1980 and 2020 were obtained from the IMF and World Bank database and analyzed. It has been concluded that there is a one-way causality from financial development to the economic growth. Given the effect of the financial development index on economic growth, it is recommended that countries consider the notion of financial development in order to grow their economies in a healthy manner. It is argued that with the changes to be made in this area, the developments in the country's financial index score will have a positive impact on the country's economy.