Analysis of the Impact Of Agro - Industrial Sectors on Pakistan's Economic Growth

The objective of the study is to measure the Impact of Agro-Industrial sector on Pakistan's economic growth. This economy is consisting of traditional agriculture sector and modern manufacturing sector. Pakistan is considered as agriculture country because more than 60% of its population is directly involved with this profession. Times series dataset from 1972 to 2012 is used to analyze the impact of Agro-Industrial sector on Pakistan's economic growth. Gross domestic product (GDP) per capita is taken as dependent variable while the explanatory variables include; inflation rate, employment of labor force, gross capital formation per worker, trade openness, agriculture value added growth rate and manufacturing value added growth rate. Auto regressive distributed lag (ARDL) model is used as statistical technique to analyze the data. Our result shows that explanatory variables of agriculture and manufacturing sectors have significant impact on dependent variable (gross domestic product (GDP) per capita). In policy recommendations, government must take steps and provide necessary incentive to accelerate growth in both agriculture and manufacturing sectors for economic development of Pakistan.