FACTOR AFFECTING GROSS DOMESTIC PRODUCT (GDP) GROWTH IN PAKISTAN

Abstract

GDP is one of the most significant metrics that professionals use to evaluate the state of a nation's economy. Growth of the (GDP) has long been seen as a contemporary subject that several scholars have researched. A nation's GDP per capita will expand inconsistently, which will increase the rate of poverty, impede advancements in the fields of health, education, and criminal justice, and, eventually, economic growth. Examine the link between Pakistan's GDP growth and variables, including labor force participation, FDI, and Inflation. The research makes use of data from 1972 to 2021 annual time series, which are the collinearity statistics VIF. The findings show that. According to the study, Pakistan's GDP growth is not statistically significantly impacted by Inflation as assessed by consumer prices. This is predicated on regression analysis, where the inflation coefficient's p-value is more than 0.05. The study's conclusions imply that FDI has no statistically meaningful effect on Pakistan's GDP growth. The coefficient for foreign direct investment is not statistically significant, according to the regression analysis (p-value > 0.05). The study further proves that there is no statistically significant relationship between labor force participation and GDP growth in Pakistan. The coefficient for labor force participation is not statistically significant, according to the regression analysis (p-value > 0.05). From this study, there is little evidence that Inflation had a direct impact on GDP growth in Pakistan throughout the examined data period despite worries about Inflation, particularly when it surpasses specific thresholds. The research indicates that, in contrast to predictions, FDI does not seem to contribute significantly to economic growth in Pakistan. This may suggest that other circumstances or causes influence the link between FDI and GDP in the nation. The study indicates that although labor force participation is crucial for economic activity, given the parameters of the analysis, its direct effect on GDP growth in Pakistan may not be statistically significant.