ASYMMETRICAL IMPACT OF FOREIGN DIRECT INVESTMENT, COMMODITY PRODUCTION AND INFLATION ON GDP GROWTH RATE OF PAKISTAN

Author(s) : Dr. Hina Ali, Dr. Salma Mouneer, Dr. Tahira Bano Qasim, Afifa Sadar Ud Din

Abstract:

Foreign direct investment, commodity production sector, and inflation play an incredibly important part in the economic growth of any country developing nations, particularly. In developing countries like Pakistan, foreign direct investment is frequently regarded as a major component of economic progress. The agriculture sector in Pakistan is extremely important to the economy, contributing 18.9% of GDP and employing 42.3 percent of the workforce, and also Industry is regarded as the most important industry for economic development. In Pakistan, as in most emerging and developed countries, inflation is a big issue. The basic motive of this research is to investigate the effect of foreign direct investment, commodity production, and inflation on the GDP rate of growth in Pakistan, by taking time-series data from 1990 to 2019, by world development indicator, and economic surveys of Pakistan. GDP rate of growth is used as dependent while, FDI, commodity production, consumer price index, interest rate, Gross capital formation, and labor force participation rate are used as explanatory variables. Based on the unit root analysis, we applied Nonlinear Autoregressive distributed lag model. And the finding revealed that a positive shock in foreign direct investment and commodity production has a positive and significant impact on Pakistan's economy, but the negative shock has a negative but insignificant influence on the economic development of Pakistan. Although the consumer price index has a negative but significant impact on the GDP growth rate