IMPACT OF FOREIGN REMITTANCES ON GDP GROWTH RATE, AGGREGATE SAVING AND INFLATION IN PAKISTAN

Abstract

Purpose: This research study is performed with an objective to determine the role of foreign remittance, its conceptual linkage to macroeconomic indicators i.e. aggregate savings, GDP and Inflation. Furthermore, this aims to investigate marginal impact of foreign remittance on aggregate savings, GDP and Inflation. Research Methodology: In this research study longitudinal research approach has been followed. The current research work is secondary in nature. This study is primarily quantitative in nature. The data range selected for current study is consisted of 16 years in time period with four different variables. In this research study internet resource is used for data collection purpose. In this research study linear regression analysis has used as regression technique to determine the impact of foreign remittances on selected independent variables. Findings of the Research: The findings of current research study revealed that there is positive impact of foreign remittances on aggregate savings, inflation and GDP but the impact on GDP is more significant followed with aggregate savings and CPI. Practical Implications: This research study provided useful information to explore role of foreign remittances on macroeconomic indicators and helps to improve the positive impact on developing saving’s habit to grow aggregate savings and results in growth in GDP with lesser impact on Inflation.