The Role of Defence Savings Certificates in Pakistan’s GDP Performance
DSCs and GDP Dynamics in Pakistan
Keywords:
Defence Savings Certificates (DSCs), National Savings Organisation (NSO), Gross Domestic Product (GDP), Gross Capital Formation (GCF), Gross Domestic Savings (GDS), State Bank of Pakistan (SBP)Abstract
This study empirically investigates the impact of Defence Saving Certificates (DSCs) on Pakistan’s gross domestic product (GDP), addressing an important gap in the literature on domestic savings instruments and macroeconomic performance. DSCs are government-sponsored, low-risk financial instruments administered by the National Savings Organisation (NSO) and are designed to mobilize household savings for public financing. Despite their widespread use and fiscal importance, their specific contribution to economic growth has remained underexplored in empirical research.
Using annual time-series data spanning the period from 1990 to 2024, this study applies an Autoregressive Integrated Moving Average (ARIMA) modeling framework to examine the dynamic relationship between GDP, DSC investments, gross capital formation (GCF), and gross domestic savings (GDS). The results indicate a statistically significant and positive relationship between DSCs and GDP, suggesting that increased investment in these certificates contributes meaningfully to overall economic output by channeling domestic savings into productive public use. Consistent with economic theory, GCF also exhibits a strong positive effect on GDP, reflecting the role of investment in driving growth. In contrast, GDS does not show a significant direct relationship with GDP within the estimated model, implying that savings alone may not translate into growth without effective financial intermediation.
The study concludes that DSCs represent an effective fiscal and financial instrument for supporting economic growth in Pakistan. It recommends policy measures to enhance their accessibility, expand digital platforms, and strengthen the institutional capacity of the NSO to better harness domestic savings for sustainable national development.
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This work is licensed under a Creative Commons Attribution 4.0 International License.
All articles published in AgriPaT are licensed under the Creative Commons Attribution 4.0 International (CC BY 4.0) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
