The Impact of Mortgage Credit on Economic Growth in Libya (An Econometric Study for the Period 1990–2021)

Abstract

This study aims to analyze and measure the relationship between mortgage credit and economic growth in Libya during the period 1990–2021, using annual reports from the Central Bank of Libya and the Ministry of Planning. The study employed both descriptive-analytical and quantitative methods, including cointegration, the Bounds Test, and the Autoregressive Distributed Lag (ARDL) model to measure long-term relationships, as well as the Error Correction Model (ECM) for short-term analysis. The results revealed an inverse equilibrium relationship between both mortgage credit and inflation with economic growth in the long term, while no relationship was found between money supply and economic growth. In the short term, there was no equilibrium relationship between mortgage credit and economic growth. This indicates that the mortgage credit provided by commercial banks has failed to develop the real estate market and meet the growing demand for housing, negatively impacting Libya’s economic growth rate.