The Role of Financial Literacy in Economic Development

Introduction: The study of financial literacy has proven its role in ensuring the well-being of citizens of different countries. Financial knowledge and skills affect citizens' lives, such as managing expenses and income, investing in stocks or somewhat risky digital assets, retirement savings and retirement planning.

Objective: This study focuses on the specifics of the impact of financial literacy on economic growth, stability and economic inequality.

Methods: The article applies a systematic approach to highlighting financial literacy issues in the context of economic growth, stability, and inequality. The methodology includes structural and functional analysis, methods of synthesis, and comparison.

Results: The article reveals a moderate direct positive correlation between financial literacy and the well-being of the population of countries, measured in GDP per capita at purchasing power parity. At the same time, the level of prosperity of a country's population has a lesser impact on the development of citizens' financial skills. A high level of awareness of macroeconomic indicators (inflation, purchasing power, interest rates) affects the ability of citizens to maintain a high level of financial well-being, plan savings, and avoid debt.

Conclusions: Given the above, there is a need to develop the financial skills of the most vulnerable segments of the population. Financial knowledge and skills, such as using digital technologies in financial management, contribute to effectively managing financial resources.