Measuring Economic Cost of Electricity Shortage: Current Challenges and Future Prospects in Pakistan

The consistent energy supply is a big challenge for Pakistan. Pakistan’s economy has been hit severely by energy crisis. The electricity shortfall rose to 6000 mega watts in 2013. This study visits the impact of electricity shortage on sectoral GDP such as agriculture, industrial and services sectors in case of Pakistan for the period of 1991-2013. The Ordinary Least Square (OLS) approach is applied for empirical analysis. Our estimates show that electricity shortage is inversely linked with agriculture sector output. Industrial sector output is negatively affected by electricity shortage. Electricity load-shedding deteriorates services sector output. The present study discusses current as well as future economic loss to be caused by electricity shortage. This study provides new insights for policy to devise a wide-ranging energy policy for sustainable agriculture sector, industrial sector and services sectors growth which not only enhances domestic output but will also speed up economic growth for better living standard for people of Pakistan