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Impact of Budget Deficit on Economic Growth and Investment in Pakistan
AbstractThis study elaborates the impacts of budget deficit.Empirical research indicates that the shortfall has unfavourable consequences on the threshold, with a fiscal deficit of 5.67% of GDP. Fiscal policy will, therefore, stimulate inflation if the fiscal gap remains below the level. A balanced budget of a nation is essential to achieve sustainable economic development. Pakistan's budget deficit has detrimental economic development impact, study finds. Some measures to discourage such budget debt amounts from exceeding the target amount of increase are planned. The findings have shown that GDP contributes to savings and deficit. The budget deficit, however, would not raise GDP, according to the report. The report often promotes Keynesian budget shortfall beliefs, it says.
- Dr. Rummana Zaheer
- Associate Professor, Department of Economics, University of Karachi, Karachi, Sindh, Pakistan
- Sumbul Jahan
- Ph. D Scholar, Department of Economics, University of Karachi, Karachi, Sindh, Pakistan