The impact of Some Public Finance variables on the Gross National Savings in Iraq

Abstract

The paper attempts to show the impact of public finance in on gross national savings in Iraq for the period 2004-2024, by using a regression analysis model in addition to adopting several statistical techniques in the purpose of testing the model validation. Unit root tests show that both gross national savings and public finance variables are stationary in levels. Regression analysis show that there are significant relationships between gross national savings and a couple public finance variables included in the model: current expenditure, capital expenditure, and Overall fiscal balance (including grants). The group of independent variables represented in this model are jointly significant. Cointegration test is established for gross national savings and public finance suggesting there is a long-run equilibrium relationship between the series. Finally, LM test result reveal that the proposed model is valid as there is no serial correlation in the errors in the model. The research came to the conclusion that there are still significant challenges for Iraq's financial system to work effectively, from which the continued need for security must be reinforced first and foremost. The suggestions from this research stress on the importance of maintaining a stable macro-financial environment and enhance the business environment. In addition, many structural reforms also have to be completed, in particular in the areas of public financial administration and banking restructuring.