Catalysts of Growth: Analyzing the Interplay of Interest Rates and Inflation in Shaping Pakistan's Automotive Industry Performance (2010-2022)

Abstract

Background: The outcome of any business entity is its net profit which is the final outcome of its investing, financing and operating activities. There are several internal and external factors that can influence the business operations. Research Aim: This study investigates with the aim to examine the effect of interest rate and inflation rates on the performance of the automobile sector of Pakistan. Methodology: Data was collected through secondary data analysis covering from 2010 to 2022 through Government reports and industry publications). The data was examined using IBM SPSS 23 and the model of this study was analyzed using the test of Linear Regression and Pearson’s correlation. Results: The findings of this study showed that the day-to-day rising inflation rate has a negative impact on the economic growth of the automobile industry in Pakistan. Conclusion: To conclude, the automobile industry is one of the key contributors to the economy of Pakistan. In shaping the performance of the automobile industry, interest rate and inflation rate plays a crucial role in Pakistan.