THE RELATIONSHIP BETWEEN ENERGY CONSUMPTION AND GROSS DOMESTIC PRODUCT: POTENTIAL IMPACT OF ENERGY CRISIS ON ECONOMIC GROWTH OF REPUBLIC OF NORTH MACEDONIA

Abstract

Energy is a key source of economic growth for any economy because of the fact that many consumption and production activities involve energy as a basic input. Energy is one of the most important inputs for econom ic development. The aim of this paper is to examine the relationship between gross domestic product and energy consumption on the sample data taken for the period from 2008 to 2020 for Republic of North Macedonia. Energy con sumption measured in kilo tons of oil equivalent is taken as an independent variable, whereas gross domestic product measured in millions of denars is taken as dependent variable. In the performed statistical tests descriptive sta tistics, correlation and regression analysis were primarily involved. The con clusion of this paper is that there is a positive relationship between energy consumption and gross domestic product in the Republic of North Macedonia. The existence of a positive relationship between growth level and energy con sumption in Republic of North Macedonia suggests that any disruption in pro duction or in consumption of the energy caused by price fluctuations or pos sible shortages of energy will have a negative impact over the country’s GDP