Efforts needed to encourage personal financing.

• Author: Fazl-E-Haider, Syed

Byline: Syed Fazl-E-Haider

With a population of over 200 million, Pakistan is the second largest economy of South Asia. The soaring inflation and rising unemployment rate demands promotion of savings culture in the country. The various saving schemes offered by the government or semi-government or private organizations helped an individual to manage hard-earned money. In broader sense, such schemes help in management of personal finance. The saving starts from an individual's personal finance. The government needs to introduce attractive saving schemes with handsome profits to promote a savings culture in Pakistan.

Pakistan's gross savings rate was measured at 5.2 percent in June 2019, compared with 5.8 percent in the previous year, according to the CEIC Data. Its gross savings rate is with an average rate of 9.6 percent. The data reached an all-time high of 17.4 percent in June 2004 and a record low of 5.2 percent in June 2019.

CEIC calculates annual Gross Domestic Savings Rate from annual Gross Domestic savings and annual Nominal GDP. Gross domestic savings is calculated as Nominal GDP less consumption expenditure. The Pakistan Bureau of Statistics provides final consumption expenditure in local currency and nominal GDP in local currency. As per the latest reports, the country's GDP expanded 3.3 percent year on year basis in June 2019. Its nominal GDP reached $315.2 billion in June 2018. Its GDP deflator (implicit price deflator) increased 7.8 percent in June 2019. The country's GDP per capita reached $1,480.9 in June 2018.

Personal finance

In finance, the term personal finance covers management of an individual's money through saving and investing. Personal finance covers all areas including budgeting, banking, insurance, mortgages, investments, retirement planning, tax and housebuilding planning. Financial planning is the key of financial management determines an individual's short and long-term financial goals and create a balanced plan to meet those goals.

The biggest goal could be the family's financial security. Usually, the financial goals in a family life consist of things such as buying a new car, a new home, enhanced career training, a long travelling vacation and most importantly self-dependency during working or after retirement. The efficient management will also take into account various financial risks and future life events.

Financial planning continues to guide an individual towards making sensible decisions about...