Economic Growth In Pakistan Essay

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In this era there has been a lot of diversification in the financial services sector, which provides the investor with a wide range of investment opportunities. Higher economic growth can be achieved via increase in personal wealth that will come from proper investment strategies and financial planning. Economic growth plays a major role in affecting the standard of living of a country. Major variables that measure the growth of an economy are Income, Saving and Investment. Saving and Investment are the two important concepts in Macroeconomics, which play a significant role in economic growth, inflation stability and reducing unemployment. Saving takes place when they consume less today in order to consume more in future. There is a trade off…show more content…
All those periods in which Pakistan received high growth coincided with the period when there was abundant inflow of foreign savings, which were in form of loans, grants and remittances. Accordingly, whenever such inflows dried up, economic growth slid back, as domestic saving and investment were never sufficient to keep up the growth momentum. There is no doubt on the fact that foreign savings are important in financing the saving-investment gap, but still the most reliable source of funds for investment in a country is its own saving. Pakistan does not hold a very good position in this aspect. National savings as per cent of GDP were around 10pc during 1960s, which increased to above 15pc in 2000s, but declined afterwards. Pakistan’s saving rate as compared to neighboring countries was very low: last five years average saving rate in India was 31.9pc, Bangladesh 29.7pc, and Sri Lanka 24.5pc. Similarly, domestic savings also declined from about 15pc of GDP in 2000s, to less than 9pc in recent

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