Structural Impacts of Inflationary Pressures on Financial Inclusion Pathways in the Arab Region: An Econometric Study for the Period 2016–2024

Abstract

Financial inclusion represents a fundamental pillar within modern development strategies, given its pivotal role in improving economic growth indicators and achieving social equity by integrating marginalized groups into the formal banking system. In this context, this study seeks to investigate the correlational relationship and the quantitative impact of inflation rates on levels of financial inclusion in the Arab region during the period 2016–2024.
Relying on an econometric approach using panel data models, the study finds a statistically significant inverse relationship, indicating that stability in the general price level is a key prerequisite for strengthening confidence in the financial system. Specifically, the results show that a one-unit decrease in the inflation rate leads to a noticeable improvement in financial inclusion indicators in Arab countries by 0.64 units, reflecting the sensitivity of access to and use of financial services to fluctuations in purchasing power..