The impact of banks' credit policy on economic growth in Iraq

Abstract

Credit policy plays a vital role in determining the economic growth path of countries. By adopting balanced and effective credit policies, investment and innovation can be enhanced and economic growth can be sustained in a sustainable manner, which contributes to enhancing the economic well-being of societies. Credit policy represents a set of decisions and directives taken by the government. Or the central bank to control the supply of money and credit in the economy. Credit is considered one of the basic factors that affect economic growth, as it can finance investments, enhance consumption, and stimulate economic activity in general. Lowering interest rates can stimulate investment and consumption, which increases economic activity and enhances growth. On the other hand, raising interest rates can reduce investment and consumption, which negatively affects growth. In addition, credit policy also affects inflation and financial stability. In short, credit policy plays a vital role in guiding economic growth and achieving financial stability, and it is important to take Carefully, according to the conditions of the economy and specific development goals, the research problem was determined by the extent to which banks’ credit policy affects economic growth. A hypothesis was determined to research whether there is an impact of policy changes related to granting bank credit on economic growth. The researcher reached a set of conclusions, the most important of which is showing the importance of Credit policy is a vital tool in directing economic growth, as appropriate interventions in the financial market can enhance investment and stimulate the economy. The researcher recommended taking measures to support emerging and innovative sectors by providing appropriate financing and an appropriate regulatory environment, which enhances innovation and enhances economic growth