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SALU-Commerce & Economics Review

Kewal H. Talreja
Zulfiqar Ali Shaikh
Muhammad Saleem Rahpoto
Naveed Ahmed Shaikh

The paper estimates the major factors affecting economic growth in Pakistan over the period of (1985-2011).The Time series properties of variables are tested using backward stepwise regression method by employing SPSS. The secondary World Bank data has been used for analysis purpose. The results of multiple regression indicate that one-dollar increase in the amount of service value added, agriculture value added, industrial value added, gross domestic savings and external debt causes GDP to increase by 1.124, 0.897, 0.702, 0.411 and 0.213 million US dollars respectively that accelerate the growth process. However, one-dollar rise in the amount of exports, FDI and gross fixed capital formation rise the GDP by 0.004, 0.003 and 0.001 million US $ that indicates the positive but insignificant association with GDP. The paper thus focuses on reforms and policies with immediately effect to boost FDI, exports and gross fixed capital formation to remove the barriers of economic growth in Pakistan.