The Role of Foreign Remittances in Fostering the GDP of Pakistan

Abstract

The study is an addition to the research to examine the contribution that worker remittances provide to Pakistan's GDP. The analysis of the study concluded the impact of workers’ remittances, inflation, unemployment rate, emigrants, and total reserves on the GDP of Pakistan. Time series data (1993 to 2021) has been gathered from different authentic sources like the World Bank and IMF. The results of the ADF unit root test indicate that emigration and inflation are stationary at levels, whereas worker remittances, the unemployment rate, and total reserves are stationary at first difference. Both a long-term and short-term link between the variables is shown by the ARDL findings. The findings demonstrate that GDP is significant impacted by each independent variable. Furthermore, the study examined that the workers’ remittances and emigrants is positively related to the GDP of Pakistan while inflation, unemployment rate, and total reserves are negatively related to the GDP of Pakistan. The findings of this study will be a great contribution to the current research for policy recommendations.