Energy Poverty and Economic Development in South Asia: A Panel Data Analysis

Abstract

This study examines the impact of energy poverty on economic development in six South Asian countries: Bangladesh, Bhutan, India, Sri Lanka, Nepal, and Pakistan, using panel data from 2001 to 2025. Economic development is measured through GDP per capita growth, while energy poverty is proxied by access to electricity (AELC) and access to clean cooking fuels and technologies (ACFT). The study also incorporates ICT imports (ICTM), inflation (INF), urbanization (URB), and foreign direct investment (FDI) as control variables. To investigate the long-run and short-run relationships among the variables, the Panel Mean Group Autoregressive Distributed Lag (PMG-ARDL) model, panel cointegration analysis, is employed. The empirical findings confirm a significant long-run relationship between energy poverty and economic development. Improved access to electricity and clean cooking technologies positively and significantly enhances economic growth. Moreover, ICT imports and foreign direct investment contribute positively to economic development. The study concludes that reducing energy poverty through improved access to modern energy services is essential for promoting inclusive and sustainable economic growth in South Asia.