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national saving in pakistan
national saving in pakistan
national saving in pakistan
Determinants of
National Savings in
Pakistan:
An Exploratory Study
Abstract:
This study examines how GDP, inflation, fiscal deficit, and interest rates
affect national savings in Pakistan, using data from 1973 to 2011. It found
that GDP (gross domestic product) growth and government spending
positively impact savings, while inflation has a negative effect. Most
variables, except inflation, positively influence short-term savings. The
model predicts that any imbalance will be corrected at a rate of 15.4% per
year.
Keywords:
National savings, GDP, inflation, fiscal deficit, age dependency ratio, rate
of interest
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Determinants of National Savings in Pakistan:
An Exploratory Study
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Pakistan's economy has been growing rapidly at about 6% annually
recently, but it needs more investments in infrastructure and education to
maintain this momentum. Foreign investment in Pakistan is less than 7% of
total capital formation, much lower than in East Asia. As a result, Pakistan
has borrowed internationally to fund its development, which has been
costly and strained its finances. To sustain growth without increasing debt
payments, the report suggests Pakistan should boost its domestic savings.
The study aims to understand how factors like growth, inflation, interest
rates, fiscal deficits, and age demographics affect Pakistan's savings,
offering recommendations to improve the country's savings rate.
National savings are crucial for Pakistan's economic growth and stability,
but saving money is often difficult due to low incomes, high inflation, and
limited finance. These challenges, government efforts like attractive savings
schemes and expanding banking services to rural areas are positive steps.
To more improvements national savings, we need to focus on economic
stability, control inflation, and educate people about the importance of
saving. By doing this, we can built and improve our national savings rate,
which will support long-term economic development and improve living
standards for everyone in Pakistan.
Reference:
Farooq-Eazam Cheema
Karachi School for Business and Leadership.
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