The Effect of Foreign Remittances on Economy of Pakistan: An Empirical Investigation

Abstract :

In this study the impact of foreign remittances on economic growth of Pakistan is investigated. Secondary time series data f0r the period of 1980 to 2013 is used in this study. Data sources included index mundi, official economic survey of Pakistan issued by the Ministry of Finance, the W0rld Development Indicat0rs, Journals and other relevant publications. GDP has been taken as dependent variable whereas foreign remittance as independent variable and other as control variables. Using the regression model, the study showed that remittances had -ive and insignificant effect on GDP growth of Pakistan and financial development had +ive & significant impact on economic growth of Pakistan. Inflati0n & exchange rate had -ive & insignificant impact on economic growth of Pakistan. As foreign remittance are the main source of the development of economy that’s why Pakistan wants established and creative g0vernment to boost up investment and economic growth in Pakistan to increase foreign fl0w of money in the economy.