Examining The Contribution of Islamic Bank to Indonesia Economic Growth

Abstract

This study aims to examine the impact of Islamic finance on economic growth in Indonesia. Several variables, namely Total Financing, Total Deposits, Inflation, and Trade Openness are employed for analysis. The research data covers quarterly observations from the first quarter of 2005 to the fourth quarter of 2021. Panel data regression analysis using the ARDL model effectively describes the relationship between the dependent and independent variables. The findings indicate that Islamic finance has a positive long-term effect on Indonesia's economic growth. The increase in Total Financing and Total Deposits provides greater room for accelerated economic growth in Indonesia.