Impact of Oil Prices on Economy of Pakistan during Crises Period (Covid-19)

Abstract

The purpose of the study is to investigate the impact of oil price fluctuations on a macro variable, the GDP growth rate of Pakistan during the crisis period (covid-19). A model includes monetary factors, interest rate, exchange rate, and the Consumer price index (CPI). The objective is to evaluate whether the economy is reactive to changes in oil prices. These monetary factors are included in our model because previous research showed that these factors are significant in determining oil prices. To provide results, time series data from 2019 to 2022 for both core and control variables were used to check the impact of oil price changes on the economy of Pakistan. The regression analysis results demonstrates that economic growth is anti-growth with an oil price increase and responds negatively in the context of emerging economies like Pakistan.