Drivers of Foreign Inflows in Pakistan: A Time-Series Analysis of Macroeconomic Factors

Abstract

Despite the recognized significance of foreign inflow in fostering economic growth and stability, Pakistan continues to grapple with understanding the intricate relationship between various macroeconomic factors and the influx of foreign investment. This study addresses the pressing need to comprehensively analyze and identify the key determinants that influence foreign inflow in Pakistan's economy. By empirically analyzing time series data, this research aims to provide valuable insights into the determinants of foreign inflow, which plays a crucial role in the stability and growth of the Pakistani economy. Understanding how factors such as GDP growth, inflation rates, exchange rates, and other macroeconomic indicators influence foreign investment can aid policymakers in formulating effective economic policies to attract and retain foreign capital. Moreover, for investors and stakeholders, the findings of this study can serve as valuable guidance for making informed decisions regarding investment strategies and the allocation of resources in Pakistan's economy. Overall, this research contributes to enhancing the understanding of the dynamics between macroeconomic factors and foreign inflow, ultimately fostering economic development and prosperity in Pakistan.