IDEAS home Printed from https://ideas.repec.org/a/eco/journ2/v16y2026i4id24196.html

The Impact of Energy Subsidy Polices on Gross Domestic Product Growth: Evidence from Emerging and Developing Economies

Author

Listed:
  • Ali, Abdelaziz Abdelmegid

    (Higher Institute of Administrative Sciences in Janaklees, Elbehera, Egypt,)

  • Youssef, Hamada Salah

    (Faculty of Politics and Economics, Suez University, Egypt,)

  • Ashour, Ghada H.

    (Economics and Finance Program, School of Business, University of Hertfordshire, Cairo, Egypt,)

  • Sayed, Mohamed Noureldin

    (Pharaohs Higher Institute for Computer Information Systems and Management, Giza, Egypt.)

Abstract

This study examines the impact of energy subsidy policies on economic growth in ten emerging and developing economies: China, India, Russia, Egypt, Mexico, Indonesia, Algeria, Malaysia, Saudi Arabia, and Iran, during the period 2010-2024, using a Panel ARDL model estimated through the Pooled Mean Group (PMG) approach. The results show that energy subsidies have a positive, albeit limited, effect on GDP growth, with a 1% increase in subsidies raising GDP only by 0.011% in the long run and 0.009% in the short run. In contrast, gross fixed capital formation and population growth show much stronger positive effects, with elasticity coefficients of 0.99% and 1.19%, respectively. The findings suggest that while energy subsidies may stimulate economic activity in the short term, they are relatively ineffective in supporting long-term growth. Accordingly, the study recommends a gradual reform of energy subsidy policies, and the redirection of financial savings towards productive investment and renewable energy sectors, to enhance financial sustainability and support sustainable economic development.

Suggested Citation

  • Ali, Abdelaziz Abdelmegid & Youssef, Hamada Salah & Ashour, Ghada H. & Sayed, Mohamed Noureldin, 2026. "The Impact of Energy Subsidy Polices on Gross Domestic Product Growth: Evidence from Emerging and Developing Economies," International Journal of Energy Economics and Policy, Econjournals, vol. 16(4), pages 123-131, July.
    • Handle: RePEc:eco:journ2:v:16:y:2026:i:4:id:24196
    DOI: 10.32479/ijeep.24196
    as

    Download full text from publisher

    File URL: https://econjournals.com/index.php/ijeep/article/download/24196/10281
    Download Restriction: no
    File URL: https://libkey.io/10.32479/ijeep.24196?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ2:v:16:y:2026:i:4:id:24196. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Monica Sinhat (email available below). General contact details of provider: https://econjournals.com/index.php/ijeep .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.