Evaluating Financial Inclusion Trends in Pakistan: An Autoregressive Integrated Moving Average Forecasting and Box-Jenkins Q Test Validation

Abstract

This initiative aims to achieve income equalization within society, thereby fostering economic growth, alleviating poverty, and enhancing the stability of the financial system. Financial inclusion represents a concerted effort to remove both price and non-price barriers that hinder public access to formal financial institutions. To examine this dynamic, the study employs time series data on financial inclusion from 2006 to 2021 for Pakistan, obtained from the World Bank database. Utilizing the Box-Jenkins ARIMA methodology, the study forecasts financial inclusion trends for the period 2022–2030. The study reveals a notable upward trend in financial inclusion, with the financial inclusion index projected to rise from 0.99 in 2021 to 1.61 by 2030. The study recommends prioritizing nationwide financial literacy programs, particularly for marginalized groups, and promoting investment in financial infrastructure and fintech innovations to enhance financial inclusion and drive sustainable economic growth.