Analysis of Financial Crowding Out in the Iraqi Economy for the Period 2004 - 2022

The Iraqi economy's performance is impacted by the rivalry between public and private investment, which raises the country's debt and reduces private investment, which in turn slows economic growth. As a result, the subject of crowding out is closely tied to both the public and private sectors and how they affect the country's economy. To determine whether financial crowding out has occurred and whether there is a reciprocal relationship between government credit and private credit, this research focused on confirming the existence of financial crowding out through the levels of government credit and private credit in Iraq. Imbalances in the dynamic term of the agreement result in the long-term achievement of the difference, and the existence of integration implies the existence of a different economic connection. In both the short and long terms, there was a considerable inverse relationship between government credit and private credit, according to trends and conventional tests like the direction of the error limit mitigation (VECM) and (Wald). Due to the rise in government credit at the expense of private credit in the Iraqi economy, it produces outcomes that are comparable to those of a crowding-out model for financial credit.