This study assesses the impact of external shocks and exchange rate movements on prices. The main benefit of this granular analysis is its ability to capture heterogeneous impacts across different products and geographical areas, which is often overlooked in macro-level studies. The model includes four global shocks: global inflation, US industrial production, global food inflation, and global oil prices. Regarding domestic factors, exchange rate, inflation expectations, and inflation persistence are considered. The dependent variables are prices, including 356 items from the Urban Consumer Price Index (CPI), 244 items from the Rural CPI, and 110 items from the Wholesale Price Index (WPI), all measured monthly. The results show that global food prices have the most significant influence on both national CPI and WPI inflation, while global oil prices have the least impact on consumer and wholesale inflation in Pakistan. Domestically, the exchange rate shows the highest pass-through effect on inflation, with inflation expectations and persistence having comparatively lower impacts.
KEYWORDS: Exchange Rate; Global Shocks; Oil Price Shocks; Inflation; Prices; Pass-Through.

JEL: E31, Q41.

Foreign aid has been an essential source of external financing for developing countries, with the belief that it can foster growth in recipient nations. Specifically, the type of aid known as Program Aid is particularly important because it provides the funds needed to implement a reform agenda in the target area or sector. However, the literature shows that the relationship between foreign aid and economic growth is complex, and empirical findings are inconclusive, necessitating further research in this area. In this context, the present study employed an innovative triangular conceptual modeling (TCM) approach to assess the effectiveness of program aid for Pakistan. The goal is to analyze effectiveness both directly, through the reform process, and indirectly, through financing development spending or fiscal deficit. Results show that program aid has a significantly positive impact on economic growth. However, this positive effect becomes negative once the effect of fiscal deficit is taken into account, suggesting that program aid is mainly used to finance fiscal deficits rather than to improve efficiency in the country. Additionally, the findings reveal that the indirect effect of program aid on economic growth is substantially larger than the direct effect. The greater indirect effects imply that the primary objective of program aid is to meet budgetary requirements or to finance the government’s development spending.
KEYWORDS: Program Aid, Economic Growth, Triangular Conceptual Modeling Technique, IMF.

JEL: F35, O19, O40, F33.

Pakistan provides export financing schemes to support exports. This study examines two main schemes: one offered by the State Bank of Pakistan (SBP) through commercial banks, and the other by the Federal Bureau of Revenue (FBR). The study evaluates the performance of these schemes from the perspectives of commercial banks (as private entities) and exporters (as beneficiaries). While large exporters improve their export performance by utilizing these schemes, the lengthy process and the time lag between production and delivery can hinder exporters’ performance. The qualitative findings indicate that these export financing schemes mainly benefit large exporting firms, while medium and small enterprises are less likely to take advantage of them due to the complexities involved.
KEYWORDS: Export Financing, Export Facilitation, Rebate, Commercial Banks, Exporting Firms.

JEL: E31, Q41.

Sustainable development in the Global South faces a complex challenge, influenced by environmental, economic, and social factors, as well as issues like poor governance, political instability, and inequality. The literature emphasizes that institutions are crucial in shaping incentives and behaviors that drive development. Inclusive institutions foster sustainability by providing equitable opportunities, safeguarding property rights, and encouraging innovation, whereas extractive institutions—marked by unequal systems and a lack of basic liberties— hinder progress. This research examines how economic and political institutions affect sustainable development in 94 developing countries from 1990 to 2019. Sustainable development, defined as the ecological efficiency of human development, is measured using the Sustainable Development Index (SDI) introduced by Hickel (2020). Economic institutions are measured using two indicators: economic freedom and de jure economic globalization, while political institutions are evaluated via de jure political globalization, judicial independence, democracy, and civil liberties. The empirical analysis shows that all indicators of inclusive institutions positively influence sustainable development in the Global South. Moreover, democracy proved to be the most effective in promoting sustainability, while the effect of de jure political globalization was the weakest in terms of magnitude (though still statistically significant). These findings underscore the vital role of inclusive institutions in achieving sustainability, highlighting their capacity to balance development goals with environmental considerations. This study demonstrates that democracy enhances sustainable development more than economic liberalization in the Global South, challenging conventional policy priorities.
KEYWORDS: Economic and Political Institutions, Sustainable Development, Economic Freedom, Civil Liberties.

JEL: E02, Q01, O43.

The study examines the impact of foreign direct investment, human capital, and financial development on labor productivity, utilizing data from 2000 to 2019 and panel data from 180 economies. The estimation technique used in the study is GMM, which helps to solve the problems of endogeneity and unobserved heterogeneity. The findings indicate that foreign direct investment, human capital, and financial development have a positive and significant relationship with labor productivity. The square term of human capital also shows a positive relationship with labor productivity, indicating increasing returns. This study contributes to the literature by examining the roles of structural and financial factors using robust techniques. Furthermore, the study’s results offer important policy recommendations, suggesting that the government should invest in projects to develop education and financial infrastructure to achieve high productivity gains.
KEYWORDS: Foreign Direct Investment, Human Capital, Financial Development, Labor Productivity, Trade Openness, System GMM.

JEL: E02, Q01, O43.

Public sector employment remains attractive for important reasons such as job security and a guaranteed pension. Evaluating alternate pension systems has gained importance among policymakers concerned about the aging population and rising poverty levels. Pakistan has a Pay-As-You-Go type pension system, financed by taxpayers’ money, and has resulted in the building up of unfunded liability for the government. The expenditures on superannuation are gradually coming into mainstream discussions on fiscal sustainability and public finance management. These additional expenditure liabilities require an increase in future taxes to be solvent. We use scenario-based projections to highlight how the existing pension system is fiscally unsustainable and what approaches are needed to make it sustainable.
KEYWORDS: Fiscal policy, public economics, public finance, tax-induced, pensions..

JEL: H3, E620.

The Asian Pacific region is spearheading the post-pandemic economic revival, and exploring regional dynamics is becoming increasingly relevant for researchers. In this regard, stock markets have always profoundly influenced a country's economic health, and its behavior varies significantly globally. This indicates stock markets' contextualized nature and response to varying incoming information. Therefore, the study examines the interplay of behavioral and developmental factors in selected stock markets from South Asia. This study draws upon data from 2014 to 2023 and utilizes VAR-based connectedness models to analyze the dynamics of stock market connectedness in the region. This study also considers the influence of pertinent regional climate, security, and economic challenges on stock market behavior. The findings indicate the presence of moderate spillovers among stock markets and from economic, environmental, and security information. Further, most of this spillover is attributed to the markets in developed nations and the economic news sentiments, while climate information's contagion is increasingly becoming relevant. These findings explain the intricate dynamics of these pertinent variables, significantly adding to the understanding of the region.
KEYWORDS: South Asia, stock markets, spillover, sustainability, terrorism, sentiments.

JEL: E44, F21, G14, O11, O44.

This study evaluates three standard food insecurity measures—Household Food Insecurity Access Scale (HFIAS), Food Consumption Score (FCS), and Minimum Dietary Energy Intake Requirement (MDER)—using survey data from 300 individuals in Bannu and Dera Ismail Khan districts in Khyber Pakhtunkhwa, Pakistan. We find a strong correlation (p < 0.01) between FCS and MDER (ρ = 0.93), indicating alignment in assessing dietary energy sufficiency. In contrast, correlations between FCS and HFIAS (ρ = 0.087) and between MDER and HFIAS (ρ = 0.079) are weak, suggesting that HFIAS captures different dimensions of food insecurity. Comparative analysis reveals that FCS and MDER often indicate more severe food insecurity than HFIAS. Bannu consistently shows higher severe food insecurity rates than Dera Ismail Khan, with ANOVA results confirming significant district differences (F = 76.14 for MDER, p = 0.000002; F = 129.1 for FCS, p = 0.00002; F = 11.85 for HFIAS, p = 0.000658). Vulnerable groups, including daily wage households, Internally Displaced Persons (IDPs), and female-headed households, exhibit higher rates of food insecurity. These disparities arise from methodological inconsistencies and the subjective nature of self-reported measures, highlighting the need for accurate measurement through comprehensive surveys to effectively understand the full extent of food insecurity.
KEYWORDS: Food insecurity, internally displaced persons, female-headed households, Food Consumption Score (FCS), Household Food Insecurity Access Scale (HFIAS),Minimum Dietary Energy Intake Requirement (MDER)..

JEL: Q18, C83, O13, D12.

This study conducted a regional analysis of poverty in Pakistan with a particular focus on trends and decomposition. Nine Household Integrated Economic Survey rounds were used in this study from 2001-02 to 2018-19. This study estimated poverty using time series data from all the regions and provinces of Pakistan. The unit of wellbeing used in the study is consumption, and the unit of analysis used is the adult equivalent. Our results show that the poverty rate decreased in all regions and provinces over the analysis period. Poverty rates decreased in all regions from 2001-02 to 2010-11. The decomposition shows that the highest population share is found in Punjab, but it has the lowest poverty share. At the same time, Baluchistan has the lowest population share and the highest poverty share. KPK and Sindh have half of their population below the poverty level. Results show that urban poverty share is higher overall than rural poverty share.
KEYWORDS: Poverty, distribution, trends, decomposition, poverty line..

JEL: I32.

We have used the Dynamic Time Warping (DTW) algorithm to calculate the forward-looking consumer inflation expectation forward-lookingness. We have used DTW instead of widely used parametric techniques as this algorithm does not require specific assumptions relating to time series data. The results suggest that expectations are more backward-looking from 2012 to 2022. Furthermore, we examined consumers' response to the exchange rate regime shift and found evidence of consumers becoming more forwardlooking due to the deliberate change in policy stance from fixed to managed float. This suggests that changes in economic policy can directly impact the consumer's expectations formation process.
KEYWORDS: Consumers, inflation, inflation expectations..

JEL: C63, F31.

Women employed in informal sectors are integral to a nation’s overall economic growth, and to better development outcomes. This study aims to examine the capabilities of these women not only in terms of personal empowerment, but in the context of sustainable development via social inclusion. Previous studies have only focused on microcredit as a “magic wand” for increasing women's empowerment and their standard of living, without the inclusion of feminist theory. The inclusion of feminist theory and social inclusion in the discussion concerning the provision of financial support to women in Pakistan, allows us to properly examine the role of sustainable development and women's empowerment in Pakistan. This study is quantitative and descriptive. Using a survey questionnaire on the cross sectional data source, the 118 women borrowers of Lahore, Pakistan, have been investigated by stratified random sampling technique. The Multinomial logit and Probit regression models have been used for data analysis. The study's results supported the actuality that women need to be financially and personally empowered, in order to benefit from greater social inclusion.
KEYWORDS: Social inclusion, sustainable development, microfinance, women's personal empowerment, informal sector.

JEL: O40, O17.

This study investigates the socioeconomic, administrative, and service quality determinants of electricity theft in Pakistan. The effect of service quality standards on electricity theft is estimated using panel data from eight electricity distribution utilities from 2006 to 2018. The results of utilizing the One-step system Generalized Method of Moments estimator confirm the statistically significant impact of social, administrative, and service quality variables on the illegal use of electricity. Based on the findings, Pakistan's National Electric Power Regulatory Authority is advised to take measures to improve the quality of services. In contrast, the nation’s Central Power Purchasing Agency is advised to improve administrative structure by separating retail function from distribution by electric distribution.
KEYWORDS: Pakistan, Electricity theft, Distribution utilities;, Service quality.

JEL: C33, O14.

This study examines the uncertainty of consumer inflation expectations in Pakistan using the data collected by the State Bank of Pakistan (SBP) through the Consumer Confidence Survey (CCS). CCS has been conducted every second month since January 2012. The research employs round numbers to calculate inflation expectation uncertainty and finds it countercyclical and positively correlated with inflation. Further, it also displays a weakly positive correlation with inflation disagreement, inflation volatility, and the Economic Policy Uncertainty (EPU) index. The study also reveals that inflation expectation uncertainty is higher for female, less educated, and young respondents compared to businessmen, males, older people, and educated. The study suggests asymmetric behavior of inflation expectations uncertainty for high and low inflation levels, where uncertainty is high when inflation is high. The study also suggests that inflation uncertainty is significantly related to food inflation. Lastly, the study establishes that inflation expectation uncertainty affects the consumption of durable goods by influencing consumer spending attitudes.
KEYWORDS: uncertainty, environmental resources, Inflation Expectations, Consumer.

JEL: E31, D18.

This paper introduces the monthly State Bank of Pakistan’s EasyData, for conducting empirical macroeconomic analysis and forecasting for Pakistan's economy. For this purpose. We perform a forecasting exercise using the conventional econometric models and the most recent machine-learning algorithms. We find that the machine-learning models outperform the benchmark and regression models based on observed factors. Furthermore, the dataset has a higher ability to predict the external variables, a possible outcome of Pakistan's economy and its persistent balance of payment problem. The focus of policy has been to address this issue.
KEYWORDS: Pakistan, forecasting, EasyData, factors, machine learning, machine-learning.

JEL: F47, C55.

This study examines the supply and demand shocks in Pakistan that affected occupations and industries during the COVID-19 pandemic. We use the remote labor index and essential scores for undertaking work activities from home across occupations proposed by del Rio-Chanona et al. (2020). To estimate demand shocks, we follow del Rio-Chanona et al. (2020), who employed estimates from the US Congressional Budget Office (2006) that attempted to forecast how the US economy would be affected at the industry level if a severe influenza epidemic occurred. We document that demand shocks most significantly affect the transport and food services industries. In contrast, the manufacturing, mining and quarrying, and handicraft and printing industries are likely to be impacted by supply shocks. Food services and restaurants experience a bigger combined shock. Relative to the pre-pandemic period, aggregate shocks suggest a decrease in the output of Pakistan’s economy by one-fifth if the pandemic were to seriously affect the economy, threatening 21 percent of jobs and lowering total wage income by 18 percent. Considering a second wave and a new variant of coronavirus, we estimate that aggregate shocks may continue, and the economy's output could deteriorate by one-fourth if the region experiences a significant outbreak. Finally, we compare our findings with the US economy and find differences between supply and demand shocks in both economies.
KEYWORDS: wages, financing shocks, value-added, COVID-19, employment.

JEL: J21, O49, I15.

Compensation structures of public sector employees have significant implications for public service delivery and employment. If public sector employees get relatively lower pay, then the government can face difficulties in retaining trained and qualified workers. However, if public sector employees receive higher salaries it is possible that younger people may prefer to join the public sector. If this is accompanied by limited job absorption capacity in the public sector, it is possible for there to be substantial unemployment. This study has analysed the wage differentials by using the data from the Pakistan Labour Force Survey 2020-21. Blinder-Oaxaca decomposition suggests that at the executive level, public sector workers are facing wage penalties, while other occupational groups in the public sector are enjoying wage premiums. The highest wage premiums are for clerical staff followed by unskilled workers, services, technician, professionals and agricultural workers.
KEYWORDS: public sector, private sector, wages, employment.

JEL: H3, E620, J31, J45, L32.

This study examines the role of foreign aid and governance in Pakistan’s human development from 1991 to 2021 utilizing the autoregressive distributed lag (ARDL) technique. It not only explores the individual impact of foreign aid and governance but also investigates how good governance affects human development. A governance indicator has been constructed by employing Principal Component Analysis based on six different governance dimensions. It is found that both good governance and foreign aid have significant and positive relationships with human development in Pakistan and good governance facilitates and reinforces the contribution of foreign aid in advancing human development. The results show that trade openness, income growth, and government expenditure also have a positive impact on human development. The Granger Causality test further verifies the causality running from foreign aid and governance to human development. The analysis implies that enhancing governance quality is important to optimizing the positive impact of foreign aid on human development. Likewise, policies to stimulate trade openness, boost government expenditure on social sectors, and more consistent income growth can play an important role in improving human development in Pakistan.
KEYWORDS: Aid, Governance, Development.

JEL: F35, O1, D73.

This study compares the prices of selected food items across three political administrations in Pakistan. We have taken monthly data from July 2008 to October 2021 of the prices of selected food items from the Pakistan Bureau of Statistics, the Ministry of Finance (Pakistan)’s Pakistan Economic Survey, and Index Mundi. Thirteen food items were selected: Wheat, Basmati Rice, Basmati Super Rice, Basmati Broken Rice, Sindh/Punjab Rice, Tinned Vegetable Ghee, Loose Vegetable Ghee, Whole Masoor Pulse, Washed Masoor Pulse, Washed Mong Pulse, Washed Mash Pulse, Gram Pulse and Refined Sugar. We theorize that an increase in prices will be independent of changes in political administration, as prices are determined purely based on economic factors in the market. We provide graphical and regression analysis, with our study pointing to a consecutive rise in the absolute price of selected food items across all three administrations. Increasing real prices of selected food items are specific to each administration.
KEYWORDS: Political administration, selected food items, nominal prices, real prices, food inflation, ARDL model.

JEL: Q11, L66, N70.

This study aims at identifying the main determinants of the annual trade flows of Pakistan with its top trade partners, including those with which the country has signed trade agreements. Given the present economic conditions of the country, it is important to identify the main determinants of trade so that the country can benefit from trade openness around the world. In addition to identifying trade determinants, the impact of adherence to a particular trade agreement was also examined. The results indicate that FTA signed by Pakistan with China and other trade partners has created trade opportunities for participating countries, highlighting the importance of trade liberalization for the long-run development of the country. Besides, the trade potential of Pakistan with selected trade partners has also been estimated.
KEYWORDS: Pakistan, gravity model, panel data, total trade, trade potential.

JEL: C23, P45, F10.

This study examines the trade potential of Pakistan with the countries of the Gulf Cooperation Council (GCC). Trade potential is estimated using the RCA (Revealed Comparative Advantage) index technique, utilizing HS-8 tariff line level data from 2007 to 2021. Our findings identify 102 products at the tariff line where Pakistan enjoys a comparative advantage. These products span various sectors, including copper, iron, steel, minerals, wood, pharmaceutical, paper, tobacco, sugar, and plastic. Furthermore, the paper discusses the trade hindering effect of factors such as the absence of effective trade agreements, shortage and high energy prices, and other high input costs.
KEYWORDS: Trade potential, Pakistan, Gulf Cooperation Council, HS-8, revealed comparative advantage.

JEL: F10, C61.