Exploring the Nexus between Digital Economy and Sustainable Economic Growth in Pakistan: A Policy Perspective

Abstract

Adopting convergent parallel mixed methods design, this study under the policy lens (2000-2026) investigates the nexus between Pakistan’s digital economy and sustainable economic growth. On the other hand, policy anticipates Pakistan Telecommunications Authority (PTA) regulatory implications, serving Pakistan's broadband growth trajectory under a 22% penetration threshold of government expenditure on economic growth, asserting a composite elasticity of 0.42 to broadband, GDP 4.2 per 10% rise in digital economy index (DEI) (0.58, p< 0.01). The causality test shows two way Digital Economy Index (DEI) and growth leading to digital spillovers but with social inclusion (employment β=0.18) and the environmental neutrality (energy β=0.22) lagging. Fiscal federalism reduces provincial debts 9-14% (β=-0.11).

Qualitative thematic analysis (25+ policy documents 22 expert interviews, κ=0.84) identifies infrastructure bottlenecks (68% docs)  regulatory fragmentation (65%) and gender gaps (27% female participation) as binding constraints. STZs demonstrate proof of concept (+35% Punjab exports).

Policy recommendations: $3B fiber/5G blitz  5M digital skills (50% female); green ICT mandates; NFC digital revenue shares (40:30:30). Simulations show 5-6 percent sustainable growth, making it South Asia’s digital front runner.