Abstract
This paper examines the relationship between financial development and economic growth in Kazakhstan over the period 2000-2023, selected according to data availability and consistency. The empirical analysis applies the Autoregressive Distributed Lag (ARDL) bounds testing approach of Pesaran, Shin, and Smith (2001), which is appropriate for time-series data with mixed orders of integration. Domestic credit to the private sector as a share of GDP is used as a proxy for financial development, while the logarithm of real GDP serves as the dependent variable. Inflation, trade openness, and gross capital formation are included as control variables. Unit root tests show that the variables are integrated at levels and first differences, confirming the suitability of the ARDL framework. The bounds test indicates a long-run equilibrium relationship among the variables. The long-run estimates suggest a positive but modest association between financial development and real GDP. In the short run, credit expansion does not immediately increase output, possibly because of Kazakhstan’s lending structure and commodity-dependent growth dynamics. The error correction mechanism indicates gradual adjustment toward equilibrium, while diagnostic tests reveal no evidence of serial correlation, heteroskedasticity, non-normality, or functional-form misspecification. The findings support policies aimed at improving the depth and efficiency of financial intermediation.