ENERGY CRISIS AND ECONOMIC GROWTH; A STUDY OF PAKISTAN'S ECONOMIC LANDSCAPE

Abstract

In this study, we examine the impact of the energy crisis on the economic growth of Pakistan. Energy is the backbone of the economy and the engine of economic growth and development of any economy. For this purpose, we used time series data from 1975 to 2017, whereas the gross domestic product (GDP) is dependent while energy consumption (EC) and trade are independent variables. The ARDL model technique is employed to observe and analyze the relationship between our dependent and independent variables. The results show that energy consumption significantly increases the GDP of Pakistan in the short and long run while trade significantly increases GDP in the long run. As the amount of energy provided for consumption increases in Pakistan, it ultimately increases the number of industries that increase the employment level, income level as well and GDP of the country, and similarly it also increases the number of exports that enhance the GDP of Pakistan. It is recommended that the government start new efficient energy creation projects and stress the best utilization of energy resources which leads toward economic growth of the economy.