Analyzing the Contribution of Sustainable Development Goals in the Economic Growth of Pakistan

Abstract

Sustainable development goals have played a significant role in economic growth of Pakistan. Developing countries like Pakistan have a major issue of sustainable development and economic growth. The main objective of the study to determine the factors of sustainable development goals effect the economic growth of Pakistan. The nature of the data was quantitative and secondary. The data for the study variables was conducted from World Bank. A time series data from 2014 to 2024 was used for analysis of the study. It has ensuring that all the variables were stationary by employing unit root tests, namely Augmented Dickey Fuller (ADF) and Phillips Perron tests. Vector Error Correction model was used based on unit root test results.  The results of the Unit Root and Phillips-Perron test showed that all the variables were stationary at first difference I (1).  This study based on Endogenous Growth Theory and sustainable development theory. The results of the study shows that the poverty rate has a statistically significant and negative influence on Economic Growth (coefficient = –0.412, p = 0.001), while employment rate has a high positive influence (coefficient = 0.376, p = 0.002). The uses energy possesses the biggest positive coefficient (0.551, p = 0.001). Unemployment has a negative effect on Economic Growth in the long run (p = 0.026), indicating that increasing unemployment erodes potential output. Government debt, while marginally significant (p = 0.079), also has a modest negative impact, as it is with fear of fiscal unsustainability and debt overhang. The error correction term is negative and highly significant (–0.472, p = 0.001), reflecting that approximately 47.2% of disequilibrium in Economic Growth is corrected each period. Among short-term effects: Poverty has a significant negative effect on Economic Growth (–0.198, p = 0.048), proving the short-run drag of poverty increases. Energy Consumption has a positive effect on Economic Growth (0.194, p = 0.021). The study suggested that broaden the energy basket to promote investments in hydroelectricity, wind, and solar energy to enable sustainable development and reduce dependence on imports. Enhance Energy Efficiency: Introduce incentives to industries and household consumers toward the use of energy-efficient technologies and practices. The negative impact of government borrowing on GDP highlights the need for sound fiscal management. Halt unproductive borrowing and concentrate on spending in growth-inducing sectors like infrastructure, healthcare, and education.  

Keywords:

Sustainable Development, Economic Growth, Unit Root Test, Vector Error, Correction Model.