Resumen
This paper investigates the effect of electricity production on GDP growth and on poverty in Bangladesh by utilizing a computable general equilibrium model (CGE) via GTAP-POV (Global Trade Analysis Project-Poverty) framework. As Bangladesh targets to transition into a middle-income country from a low-income country by 2021, GDP growth and reduction of poverty are crucial factors for achieving this goal. One of the ways of increasing the GDP growth is by increasing the production of electricity. By calculating the electricity production requirement, we found that, by increasing electricity production by 25%, it is possible to increase the GDP growth of Bangladesh by 1%. The results also suggest that, whenever there is an increase in electricity production, there is an increase in output in non-agricultural sectors as well. Furthermore, the skilled workers in the economy benefit more and perform better considering the reduction of poverty. A robustness check has been conducted by reducing the tax on electricity, and it suggests similar results.JEL classification: O40, Q43, Q48Keywords: GDP growth, Poverty, GTAP-POV, Bangladesh