THE ROLE OF DIGITAL ECONOMY IN SHAPING PAKISTAN'S ECONOMIC FUTURE: A RESEARCH AGENDA

Dildar Ali; Aliah Batool; Zeeshan Haider

Authors

Dildar Ali Author
Aliah Batool Author
Zeeshan Haider Author

Keywords:

Digital economy, Pakistan growth, PMG-ARDL panels, VECM cointegration, SVAR transmission, Fintech multipliers, Provincial heterogeneity, Fiscal multipliers, Digital infrastructure, 5G economics, Policy simulations

Abstract

Comprehensive 2010-2025 PMG-ARDL, VECM, and SVAR analysis across Pakistan's national/provincial datasets establishes 0.452 long-run elasticity between Digital Transformation Index and GDP growth, generating PKR 4.52 return per PKR 1 digital investment with 67.3% quarterly error correction speed. Fintech dominates services (0.598 elasticity), cloud leads manufacturing (0.567), AgriTech governs agriculture (0.634). Provincial gradients reveal Punjab-Sindh 2.34× Balochistan returns with spatial spillovers (ρ=0.237). Policy simulations project PKR 17.4 trillion cumulative GDP uplift (20.6% GDP) by 2030 through 3.13-4.74× multipliers. Optimal 24% fiscal reallocation toward spectrum auctions, PDA $1B fiber programming, fintech→cloud→agritech sequencing confirms Digital Pakistan Vision efficacy. Digital transformation emerges as Pakistan's definitive structural catalyst for upper-middle income convergence, recalibrating growth accounting with 42.1% digital contribution versus physical capital's 28.4%.