Foreign Direct Investment Impact, Remittances and Foreign Debt on Economic Growth (GDP) Of Pakistan

Abstract

The present study analyzes the impact of FDI, Remittances, and foreign debt on the GDP of Pakistan. The study has used data of these variables from World Development Indicators and Pakistan Bureau of Statistics from the year 1981 to 2019, by taking Gross Domestic Product as the dependent variable while FDI, Remittances, and Foreign Debt are taken as independent variables. Results show that FDI indicates a positive trend of investment, which means an increase in the country's GDP and growth, whereas remittances have a negative influence on GDP because they diminish beneficiaries' labor supply and participation rate in the labor force. On the other hand, debt has a detrimental impact on the economy. Overall, the results show that FDI plays important role in Pakistan’s economy and has a strong contribution in determining the economic growth of Pakistan.