Money from Abroad, Growth at Home: The Role of Remittances in Pakistan’s Economy
Keywords:
Remittances, GDP Growth, GNI Gross National Income, Pakistan’s economy, Economic developmentAbstract
The impact of international remittances on Pakistan’s economic growth and income over the years 2000 to 2023 is explored in this study. Foreign exchange is mostly driven in Pakistan by remittances, after the amount of foreign direct investment. Using information from the World Development Indicators (WDI) and performing regression analysis in EViews, this analysis finds that remittances are related to higher GDP growth and GNI, with statistical significance. Although the remittance variable has a positive coefficient in the GDP growth model, the model faces problems with a low R-squared value and possible autocorrelation. Meanwhile, the GNI model shows good performance, as remittances explain 78.86% of how GNI changes. The evidence indicates that remittances greatly support Pakistan’s national income and economic development and to solve problems and omitted variable biases, more studies are necessary. The research ends by suggesting policies that could help remittances support financial security, economy stability and sustainable development.
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