Relationship between Stock and Commodity Market Development on Economic Growth.

Abstract

The stock and commodity markets are integral to the macroeconomic function of the country as a whole. The stock market allows finances to be raised through shares and bonds while the commodity market is a great tool for the economy to fulfill its demands of raw materials and can also be a great procurer of foreign exchange. In this paper FDI, exchange rate, and inflation are taken as determinants of stock market performance, and for commodity markets, oil is used as a determinant. Data is taken from 2005-2020 to gauge the performance of each market against the economy. We found out that inflation and exchange rate were deemed to be significant in the workings of the stock market and foreign direct investment was deemed to be insignificant. Oil prices were also deemed to be insignificant in relation to GDP. Structural and supply side reforms were advised to improve the workings of the stock market by making it more efficient