Abstract:

This paper introduces the causal associations between electricity consumption and economic growth for Pakistan based on time series of annual data from 1980 up to 2016 by utilizing Johansen cointegration testing and Granger Causality approaches. The Johansen cointegration testing findings proved that the cointegrating and long run associations exists between selected variables and empirical evidences found that the relationships of electricity consumptions and economic growth existing one-way causality direction. Renewable along with the nuclear energy projects should be encouraged by approving the favorable energy policies. Pakistan’s government needs to develop solar energy projects to produce electricity to meet the rising of energy demand in the country.