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March 29, 2026Discover SustainabilityOpen Access

The effect of inflation on economic growth in somalia using ARDL model

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Authors

ATAbdirahman Mohamed Ali TaanaayFWFelix WamonoJAJohn Bosco Asiimwe

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Overview

Analysis finds inflation negatively affects economic growth in Somalia, indicating a need for stable pricing.

Key Points

  • The aim is to assess how inflation impacts economic growth in Somalia using time-series data from 1990-2023.
  • Used ARDL bounds testing approach for short-run and long-run analysis.
  • Incorporated control variables such as government expenditure and foreign direct investment.
  • Conducted unit root tests to confirm mixed integration orders.
  • Validated long-run results with DOLS and CCR estimators.
  • Inflation has a negative and statistically significant effect on economic growth.
  • A 1 percent increase in inflation reduces GDP per capita growth by about 0.22 percent in the long run.
  • Government expenditure positively impacts growth, while foreign direct investment shows a negative effect.
  • Gross capital formation is statistically insignificant, indicating inefficiencies in investment.

Cite This Study

Taanaay et al. (2026) studied this question.

synapsesocial.com/papers/69c8c43ede0f0f753b39eed4https://doi.org/10.1007/s43621-026-03068-1
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Also Consider

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