Correlation of Islamic Financing and Economic Growth through A Panel Data Approach

One of the strengthening of the financial sector is through financing, therefore what factors are needed that can encourage financing growth. This study aims to analyze economic growth, assets and Non-Performing Financing affecting Islamic financing during the period Q1 2017 to Q4 2022. The research went through the unit root test stage, panel data estimation, then panel data regression was selected using the Fixed Effect Model method. Based on the results of the research, it was concluded that economic growth, assets and NPF together affect Islamic financing in Malaysia, Saudi Arabia, Bahrain, the United Arab Emirates and Qatar. Economic growth and assets have a positive and significant influence on financing. Meanwhile, NPF has a negative influence on financing. The higher the NPF will affect the quality of financing, so it can lower the bank's health level.