The impact of tourism industry on the economic growth of Pakistan

Abstract

The fundamental plan of the study is to explore the impact of tourism receipt on Pakistan’s gross domestic product growth and use the data set from 1995 to 2019. This study employed ARDL techniques for estimation. The study reveals that the economic growth (later on GGDP) has been favourably and significantly affected by the labour force, foreign direct investment, exchange rate, and gross national expenditure. However, gross capital formation and human capital showed an encouraging outcome on the economy in the long period but showed unfavourable and noteworthy effects in the short period. The tourism receipt and inflation rate have a favourable and noteworthy influence on the GGDP in the long run, but they have an inconsequential impact on the GGDP in the near run. This study concluded that tourism receipt has significantly influenced Pakistan’s GGDP. This study recommended that the government should focus on the promotion of tourism in Pakistan to earn more revenue and enhance economic growth. The government also devised feasible and flexible policies and has provided facilities to attract foreign tourists for the country’s economic development.