Abstract:
Foreign capital inflows have significant relation with economic growth of Pakistan. The main
capital inflows are FDI, Foreign debt and remittances by overseas Pakistanis. These three
components are crucial solving financial issues of Pakistan. However, all three has different
repercussions on economy. In order to find out relation between these three components we used
quantitative method which substantiated our arguments statistically. We have found that FDI is
the most beneficial component for the economy of Pakistan. Second is remittances by overseas
Pakistanis. Although it doesn’t help in significant growth of economy; however, it helps Pakistan
in resolving balance of payment crisis. Last component is foreign debt. It also has a significant
relation with GDP; nevertheless, it is negative relation. Therefore, it would be appropriate to say
that Pakistan needs to increase FDI as it is most beneficial foreign capital inflow. Hence,
. Government can government needs to make the social milieu conducive for foreign investment
by politically stabilizing the country. Moreover, government needs to eradicate
of Information technology and vigilant system of
increase FDI
corruption by increasing the usage
lability. Besides it, Government should overhaul its taxation system so that its dependence
be reduced and it can truly become and independent country. Then
accoun
on foreign investment can
Pakistan’s economic and social indicators will be improved and Pakistan will be prospered
