Impact of Energy Crisis on Economic Growth of Pakistan

Abstract

Energy plays vital role in growth of any economy. The study relates energy consumption with economic growth for Pakistan based on the sample data taken for the period of 1982-2011. Energy consumption is taken as independent and GDP as dependent variable. Data is analyzed through descriptive statistics, correlation and regression tests. Descriptive statistics gives general summary and features of the data. Correlation results show the variables are strongly related to each other. While regression shows that if energy consumption increases by 1 kilo ton of oil equivalent, the GDP will increase by $2.517 million. These results identify how important energy consumption is for the economic growth of Pakistan. Government of Pakistan should focus on utilization of energy resources which in turn will smooth the way for economic growth.