EFFECT OF MACROECONOMIC FACTORS ON WORKERS REMITTANCES IN PAKISTAN i.e. GDP, EXCHANGE RATE & INFLATION: A CRITICAL STUDY

Abstract

Purpose:Actual purpose of this study was to define role of remittances as remittances represent one of the major international flows of financial means.This study is conducted to observe the impact of macroeconomic factors on remittances including exchange rate, inflation & Gross Domestic Product (GDP), on a developing country “Pakistan” during the period 1980-2016. Methodology/sample: Research Design is a document or a manuscript, the study is mainly an explanatory study and follows quantitative design. The study focuses on effect of Macroeconomic factors on Worker’s remittance i.e. Gross Domestic Product, Exchange rate and Inflation, keeping in mind that the research should cover all the requisites and justifications from a sample size of time series data of macroeconomic factors from 1980 till 2016. Findings:The analysis and comparative results clearly suggested that all three factors impact remittances in different ways and their counter effects on economy are judged. There are significant relationship that shows a positive direct relationship in GDP & Remittances, whereas in two other variables i.e. Exchange rate and Inflation have negative relationship with remittances inflow in Pakistan Economy. Practical ImpIications:The outcomes of the research might help the corporate decision makers, government policy formulators and other related quarters to understand the impact & significance of workers remittances and their respective relationships with variables. The study might help related government institutions to define and direct remittances inflows in much better and effective ways to extract valuable outcomes.