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Assignment
Group Report
M.COM (M) 4th
Submitted By
Group Members Roll No.
Samsam Rauf 28
Sana Shafiq 33
Ameer Hamza 38
Submitted to:
Dr. Allah Bakhsh Khan

Term Paper

Relationship between Export and Economic

Growth of Pakistan

Abstract:
In this era of open economy, nations are concerned with
increasing the quality of life of their citizens. And, the quality of life mainly
comes from the macro-economic prosperity. Thus, fast growth of gross
domestic Product has become the most important objective of any economy.

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There are various approaches to achieve this target of which one strategy is to
promote exports of the country. At this point, an important issue immediately
breaks the minds of economists and researchers, that is, whether export
promotion leads to higher economic growth or economic growth promotes
exports.

Introduction:

This term project, which is about the relationship between exports

and economic growth in Pakistan, is prepared for fulfilling the requirement of
International Finance course. The work started as assigned by the honorable
Course Instructor Sir, Allah Bakhsh Khan.
The nature of the relationship between exports and country’s
economic growth has been one of the most debated topic in the recent past, yet
with little consensus. The determination of the causal pattern between export
and growth has important implications for policy-makers' decisions about the
appropriate growth and development strategies and policies to adopt. This
paper investigates the causality between exports and economic growth of
Pakistan.

There are two extreme views, which have attempted to assess the
relationship exports and economic growth, i.e., according to the views of first
group export is regarded as it is contributing positively to the economic growth.
The second group have regarded export, as it does not have a contribution to
economic growth. The reasons given by the most of economists are:
 Export growth may reflect a rise in the demand for the country’s outputs,
and this in turn will be realized in economic growth.
 By raising the level of exports, additional foreign exchange will be
generated, and this facilitates the purchase of productive intermediate
goods.
 A growth in export may lead to greater productive efficiency.

1. Objectives:

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The general objective of this term paper is to provide an outline of the

following statement that, the economic growth is based on exports or economic
growth is export led or not.
The main objective of this term paper is to analyze the relationship
between export and economic growth and to find whether the economic
growth is export led or exports depends upon growth.

2. Origin of the Term Paper:

The main purpose of this term paper is to implement the
knowledge, gathered during this course, to some practical work by explaining
the relationship between exports and economic growth by using secondary
sources. We have taken the initiative to prepare this term paper with much
precision and by being completely unbiased.

3. Background of Term Paper:

Numbers of studies have been conducted to examine the
link between exports and economic growth. Various studies have proved that
there exists a strong relationship between exports and economic growth.
Classical economists Adam Smith and David Ricardo laid emphasis on the
significance of foreign trade for a country’s economic progress.

Data and Analysis:

For Examining the relationship of export and
economic growth the performance trends of GDP growth and Exports
growth rate from 2016 - 2019 are as follows:
Years GDP$(billions) Exports$(billions)

2018-2019 284.214 24.217

2017-2018 314.6  23.631
2016-2017 304.95 20.422
2015-2016 278.65 20.787

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2014-2015 270.56 23.667

350

300

250

200 In
GDP (billion USD)
150 Exports (billion USD)

100

50

0
2014-15 2015-16 2016-17 2017-18 2018-19

Pakistan, after the analysis of the above data it is difficult to say that whether the
economic growth led growth in exports or there is export led economic growth.
As it can be seen in the above graph that in some years even
though GDP (the symbol of economic growth) increases or grows but it has
negative impact on the exports of the country and vice versa.

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Chart Title
350

300

250

200

150

100

50

0
2014-15 2015-16 2016-17 2017-18 2018-19

GDP(billions) Series 2

In this Graph we can see that the relationship b/w GDP and Exports of the
Pakistan, in year 2015 the GDP was 270.56 billion and Export was 23.667 billion
and when we see in year 2016 Export was Decrease but GDP increase. Same as
we see in the year 2018 and 2019. In 2019 the Export increases as compared to
year 2018 but GDP decreases.

Conceptual Framework:

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Exports

GDP (Gross
Foreign
Domestic
Exchange
Product)

FDI
BOT then
(Foreign
Balance of
Direct
Payment
Investment

Exports Statistics Last 5 Years

http://www.pbs.gov.pk/sites/default/files//tables/rename-as-per-table-type/14.01.pdf

Exports by commodities Last 5 Years

http://www.pbs.gov.pk/sites/default/files//tables/rename-as-per-table-type/14.02.pdf
Exports by Economic Categories (Summary)
http://www.pbs.gov.pk/sites/default/files//tables/rename-as-per-table-type/14.04.pdf

Methodology:
The main purpose of this research is to investigate causality between
exports and economic growth of Pakistan. The study uses annual time-series
data sets for the period 2015-2019 The main source of data is World Bank
Development Indicators. The data used in the analysis is based on two variables
Gross Domestic Product, Exports.

Source of Information:
To full fill the objective of this term paper, collection of relevant, accurate,
standardized and needful information was required. To make this term paper

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reliable we have collected data from secondary sources. The whole term paper
is prepared based on secondary sources. That is why there is no primary source.
Special consideration was given so that chances of biasness could not arise. The
sources used were:

Secondary Sources:
Secondary sources are those which simplify the process of
finding and evaluating the primary literature. Secondary data was available
which is entirely appropriate and wholly adequate to draw conclusions and
answer the question or solve the problem.
To know exactly how to prepare the term paper, we have
referred differed secondary sources. Secondary sources were consulted for an
understanding of techniques of writing feasibility studies and for other relevant
information. Few publications and web pages were also browsed.

 Journal articles
 Newspaper and popular magazine articles
 Internet
 Review articles and literature reviews
 Economy of Pakistan(Article)

Findings
 We think that export is core factor for an economy.
 It play a key role in development of infrastructure of an
economy.
 Due to export foreign currency come to the home country.
 Foreign investors invest in that country.
 There is deficit in the economy of Pakistan.
 Weak macroeconomic policies.
 Political instability.
 High interest rates so that a small supplier can’t afford the
expenses of exports.
Conclusion:

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In the light of above information, it can be concluded that

there exists a complex relationship between export and economic growth,
means that the economic growth depends on other factors as well as exports. It
is very difficult to tell whether economic growth is export led or growth in
exports depends upon the economic growth.
As some economists vote in favor of exports led theory and
others against it. Even some economist has a view that there is a negative
impact of exports on economic growth.
The export-led economic growth strategy is mostly important for two reasons.
Firstly, it can generate the profit which enables the country to balance their
investment and surpass their liabilities, Secondly; the most arguable reason is
that export growth can increase the productivity by removing the inefficiencies
from the economy.

Limitations:
No study is beyond any limitations. While, doing this research study
we had to face some difficulties. The limitations of the research activities are as
follows:
 we did not have so much experience for conducting research and
preparing the term paper very frequently, though we are in
learning position.
 There was a lack of precise information
 Our resources were limited. So, it was hard for us to prepare a
professional term paper.
 It was hard to get the real information which was needed to
be explored the current situation.
 The pressure of other presentations assignments and reports.

Reference List:

 From Wikipedia, the free encyclopedia. Available from: https://en.wikipedia.org/wiki/Economy_of_Pakistan

 From Trading Economics. Available from: https://tradingeconomics.com/pakistan

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 From Bureau of statistics, Government of Pakistan. Available from: http://www.pbs.gov.pk/sites/default/files//tables/14.01.pdf

 From Bureau of statistics, Government of Pakistan. Available from: http://www.pbs.gov.pk/trade-tables

 From Bureau of statistics, Government of Pakistan. Available from: http://www.pbs.gov.pk/sites/default/files//tables/14.08%20.pdf

 From Research gate, Article, Athar Iqbal, Dr. Irfan Hameed, Komal Devi. Available from:
https://www.researchgate.net/publication/255856079_Relationship_between_Exports_and_Economic_Growth_of_Pakistan

 From Ijecm, Article, Mohsin Raza, Zhang Xi Ying. Available from: http://ijecm.co.uk/wp-content/uploads/2017/02/5213.pdf

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