Effect of Macro-Economic Indicators on Economic Activity of Pakistan.

Abstract

This study seeks to interrogate the impact of unemployment, gross domestic savings, government debt to GDP, inflation, foreign direct investment and personal remittances received on GDP in the context of Pakistan from 1990 to present situation of covid-19 and how it effects the economy of Pakistan. It was hypothesized in the literature that macroeconomic factors have substantial and subsequential impact on GDP and it influences the economy of Pakistan. Macroeconomic indicators and GDP has been diagnosed using ARDL model. Based on this evidence, it is expected that some factors have a significant and subsequential impact on the GDP. The results are based on the secondary data that was extracted from World bank, Index mundi, state bank of Pakistan and Economic reforms. This study has employed the statistical tool of EViews 11 to explore the relationship between unemployment, gross domestic savings, government debt to GDP, inflation, foreign direct investment, personal remittances and GDP. It has been indicated by this study at the end that gross domestic savings, government debt to GDP, inflation and personal remittances received has a significant influence on GDP whereas unemployment and foreign direct investment has insignificant influence on GDP. The findings of this study help the investors and researchers to better understand the effect of macroeconomic factor on GDP in the context of Pakistan in present situation of covid-19 and its influence on economy as well.