Balancing Growth and Sustainability: The Role of Economic Factors in Adjusted Net Savings in South Asia

This study aims to investigate the determinants of adjusted net savings (ANS) in South Asia from 1985 to 2023, focusing on how macroeconomic factors such as final consumption expenditure (FCE), foreign direct investment (FDI), inflation, GDP growth, and domestic credit to the private sector (CRE) influence sustainable savings.This research employs an Autoregressive Distributed Lag (ARDL) model and an Error Correction Model (ECM) to examine the long-term and short-term relationships between the variables.The results indicate that higher FCE significantly reduces ANS, while GDP growth positively contributes to sustainable savings.FDI shows a delayed positive effect, suggesting its long-term benefits, whereas inflation does not significantly impact ANS in the short run.CRE demonstrates a positive but inconsistent effect on sustainable savings.The ECM results confirm a long-run equilibrium relationship among the variables, with adjustments for short-run deviations occurring over time.This study contributes to the literature on sustainable economic development by providing empirical evidence on the determinants of ANS in South Asia.It emphasizes the importance of balancing economic growth with responsible consumption and financial development, offering valuable policy insights for enhancing sustainability in the region.