Impact of macroeconomic factors on development of Paki-stan


  • Ifran Khan PMAS-Arid Agriculture University, Pakistan
  • Muhammad Imran Nazir Zhongnan University of economics and law
  • Zeeshan Fareed Zhongnan University of economics and law
  • Muhammad Rizwan Nazir Mohammad Ali jinnah university islamabad
  • Faryal Faryal PMAS-Arid Agriculture University, Pakistan





Macroeconomic Factors, OLS, Economy of Pakistan.


Macroeconomic factors play a fundamental role in attracting the growth the country. This research examined the impact of various macroeconomic factors on GDP of Pakistan for the period of 1975-2015. The core objective of this research was to check the impact of inflation, investment, exchange rate and net export on development of Pakistan. The tool for analysis was Ordinary Least Square (OLS) multiple regression model. This research used Descriptive Statistics, Harvey's test for checking the heteroscedasticity and Breusch Godfrey LM test to check autocorrelation among variables. The results of this study show that inflation exerts negative significant effect on Pakistan GDP whereas investment shows positive significant effect and exchange rate have positive insignificant effect on GDP of Pakistan. Moreover net export has been highly positive significant on Pakistan GDP.


[1] Ahmad, A., Ahmad, N., & Ali, S. (2013). Exchange rate and economic growth in Pakistan. Journal of Basic and Applied Scientific Research, 3 (8), 740-746.

[2] Antwi, S., Mills, E. F., & Zhao, X. (2013). Impact of Macroeconomic factors on economic growth in Ghana: A co integration analysis. International Journal of Academic Research in Accounting, Finance and Management Sciences, 3 (1), 35-45.

[3] Auranzeb, D., & Haq, A. U. (2012). Impact of investment activities on economic growth of Pakistan. Business and Management Review, 2 (1), 92-100.

[4] Chaudhry, I. S., Ayyoub, M., & Imran, F. (2013). Does inflation matter for sectoral growth in Pakistan? An empirical analysis. Pakistan Economic and Social Review, 51 (1), 71-92.

[5] Edoumiekumo, S. G., & Opukri, C. O. (2013). Economic growth factor in Nigeria: The role of global trade. American Journal of Humanities and Social Sciences, 1 (2), 51-55.

[6] Falki, N. (2009). Impact of foreign direct investment on economic growth in Pakistan. International Review of Business Research Papers, 5 (5), 110-120.

[7] Ghani, E., & Din, M. U. (2006). The impact of public investment on economic growth in Pakistan. The Pakistan Development Review, 45 (1), 87-98.

[8] Gudaro, A. M., Chhapra, I. U., & Sheikh, S. A. (2010). Impact of foreign direct investment on economic growth: A case study of Pakistan. Journal of Management and Social Sciences, 6 (2), 84-92.

[9] Ilegbinosa, I. A., Michael, A., & Watson, S. I. (2015). Domestic investment and economic growth in Nigeria from 1970-2013: An econometric analysis. Canadian Social Sciences, 11 (6), 70-79.

[10] Iqbal, Z., & Zahid, G. M. (1998). Macroeconomic Determinants of Economic Growth in Pakistan. The Pakistan Development Review, 37 (2), 125-148.

[11] Javed, Z. H., & Farooq, M. (2009). Economic growth and exchange rate volatility in case of Pakistan. Pakistan Journal of Life and Social Sciences, 7 (2), 112-118.

[12] Kasidi, F., & Mwakanemela, K. (2013). Impact of inflation on economic growth: A case study of Tanzania. Asian Journal of Empirical Research, 3 (4).

[13] Khan, R. E., Sattar, R., & Rehman, H. U. (2012). Effectiveness of exchange rate in Pakistan: causality analysis. Pakistan Journal of Commerce and Social Sciences, 6 (1), 83-96.

[14] Khan, W. A., Babar, Z. K., Jaskani, J. H., Omair, M., Ameen, H., & Sameen, S. N. (2014). Determinants of economic growth trends in Pakistan. International Journal of Accounting and Financial Reporting, 4 (2).

[15] Kilavuz, E., & Topcu, B. A. (2012). Exports and economic growth in the case of the manufacturing industry: Panel data analysis of developing countries. International Journal of Economics and Financial Issues, 2 (2), 201-215.

[16] Kolawole, B. O. (2013). Growth-effects of macroeconomic stability factors: empirical evidence from Nigeria. Developing Country Studies, 3 (14).

[17] Machi, I. O. (2011). The determinants of economic growth in Nigeria. Journal of Research and Development, 2 (1), 231-247.

[18] Munir, Q., & Mansur, K. (2009). Non-linearity between inflation rate and GDP growth in Malaysia. Economics Bulletin, 29 (3), 1555-1569.

[19] Rahman, M. M., & Salah Uddin, M. (2010). The determinants of economic growth in Pakistan: Does stock market development play a major role? Economic Issues, 15(2), 69-86.

[20] Shihab, R. A., Soufan, T., & Khliq, S. A. (2014). The casual relationship between exports and economic growth in Jordan. International Journal of Business and Social Sciences, 5 (3).

[21] Sial, M. H., Hashmi, M. H., & Anwar, S. (2010). Role of investment in the course of economic growth in Pakistan. World Academy of Sciences, Engineering and Technology, 4 (6), 160.

[22] Ullah, F., & Rauf, A. (2013). Impacts of macroeconomic variables on economic growth: A panel data analysis of selected Asian countries. International Journal of Information, Business and Management, 5 (2), 4.

[23] Ullah, S., Khan, S., & Ullah, F. (2014). Assessment of key determinants for economic growth in Pakistan. Theoretical and Applied Economics, 9 (598), 103-114.

View Full Article: