impact of macroeconomic determinants on economic GROWTH OF PAKISTAN

Abstract

Purpose-This Paper investigates the impact of four selected factors(independent variables) on Gross Domestic Product (GDP) in Pakistan economy. Methodology/sample-This is quantitative, illustrative paper that relies on the secondary base data.Economic growth measured in GDP by using time series data over the period 2005/06 to 2014/15 for the 10 years.Data gathered from World Bank and State Bank of Pakistan. GDP represent the dependent variable and independent variables taken such aslnflation, Interest Rate, FDI and Real Exchange Rate.The discrete implication of the variables, overall worth and objectivity of the econometric model evaluated.SPSS software was used for Regression, Descriptive statstics and Correlation analysis between variables.. Findings- This paper showed positive relationship of GDP and FDI;whereas inflation, Interest rate and Exchange rate showed negative impact with GDP Practical Implications To review the Impact of Macroeconomic determinants and economic growth of Pakistan by relating dependent and independent variable with in influence of uncertain up and downs policies.In this paper it is suggested to government to enhanceprogressiveoutflow in yearly budget that would decisivelyinfluenceoptimistic growth of economy in the country. Whiledevising monetary policy,The economic expert consideration need to include all these variables for strengthening hedging phenomenon in order to trigger pin points in much efficient way as practice usually followed in developed countries. This paper would create a better understanding regarding the long-run relationship of economic growth and macroeconomic determinants.