Electricity Consumption and Economic Growth of Vietnam in 1986-2020

Abstract

Energy consumption and economic growth have an inseparable relationship, affecting the development situation in all aspects of a country. A well-coordinated relationship between energy consumption and economic growth will help the economy develop strongly. This is based on the assumption that energy is being used optimally, avoiding excessive energy consumption, which would lead to energy depletion, with the result that the economic situation remains undeveloped or there is slow development. Electricity plays an important role for each country in the world in general and Vietnam in particular. Vietnam is a developing country; along with that is the great contribution of electric energy to production/business activities, and the daily life of each person. Electricity is an input to help operate machines, improve productivity, and achieve high efficiency in economic activities. Production and business activities will be stalled, negatively affecting economic growth in countries including Vietnam when countries lack electricity. This article assesses the impact of electricity consumption on Vietnam’s economic growth in the period 1986-2020. The estimated results of the ARDL (Autoregressive Distributed Lag) model show that electricity consumption has an impact on economic growth in the short term and long term.