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Impact of foreign direct investment on economic growth of Pakistan has been discussed in this paper. This paper used the data for the time period 1996 to 2015 and statistical techniques, i.e., correlation matrix and regression analysis have been used to see the effect of independent variable (FDI, exports, domestic capital, index of human capital and No. of terrorist attacks) on the dependent variable GDP. The result shows that there is a significant relationship between foreign direct investment and gross domestic product of the country. Other independent variables like exports, domestic capital, Index of human capital and No. of terrorist attacks also affects the economic development of the country. Expanded exports, more domestic capital and good human capital support the economic growth and government should try to eradicate terrorism for attracting more foreign investment.
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