Energy poverty is one of the important factors affecting the economic growth of countries. In the MENA countries, the level of access to energy and its related costs can determine the path of economic development. Explaining the relationship between energy poverty and economic growth helps governments to formulate more effective policies in the energy sector. Therefore, the present study examines the relationship between energy poverty and economic growth in 14 MENA countries during the period 2010 to 2022, with a special focus on analyzing the short-term and long-term effects of this relationship.
The research method is quantitative and uses annual data from the countries studied. For data analysis, panel vector autoregressive (PVAR) and fully modified ordinary least squares (FMOLS) models are used. Also, the effects of sudden shocks in the variables of energy poverty, education, inflation rate and unemployment rate on economic growth are examined through instantaneous response functions and error variance analysis.
The results show that a sudden shock in energy poverty increases economic growth in the short term during the first two years, but this effect decreases from the third year onwards and is completely neutralized in the sixth year. In the long term, energy poverty has a negative and significant effect on economic growth; so that a one percent increase in the energy poverty index causes a 0.811 percent decrease in economic growth. Also, shocks resulting from an increase in education, inflation and unemployment rates have also left negative and significant effects on economic growth. Finally, the findings emphasize the need for proper management of energy expenditures, targeted investment in education, controlling inflation rates and reforming the labor market to achieve sustainable economic growth in the MENA region.