Impact of Financial Developments on an Economic Performance: A Study of Pakistan

This paper investigates the role of financial development toward economic performance in Pakistan. To examine the role of financial development on economic performance in Pakistan we have taken 42 years’ time period. The regression analysis is used to check the relationship among variables. Findings of the study suggest that GDP growth is having highly significant and positive relationship with domestic credit, imports and exports. However GDP growth is having negative relationship with trade openness and liquid liabilities. Results also suggest that there is a need of relaxation of monetary policy to distribute productive credit in business community. This expansion of funds will improve productivity and positive impact on GDP growth