Pakistan – Lowest Rate Of Capital Formation

Pakistan has a very low rate of capital formation. It is mainly due to low saving rate which ultimately leads to low investment rate in the country. The rate of national savings in Pakistan is around 20% of GDP which significantly falls shorts of the requirements.

To increase the saving rate, a number of saving schemes have been introduced in the country. Of them, Defence Savings Certificates, National Deposits Certificates, Khas Deposit Certificates, Premium Savings Certificates, Special Savings Accounts, Mahana Amdani Accounts, Prize Bonds, WAPDA Bearer Certificates and NIT Units, etc are mentionable.

But due to low per capita income of majority of the people, inflationary trend, social attitude of people towards the social values, unequal distribution of wealth etc., saving ratio is not increasing up to required level.