Measuring and Analyzing the Determinants of the Non-Oil Trade Balance in Iraq for the Period 2004–2023

Abstract

This research seeks to assess and examine the factors influencing Iraq's non-oil trade balance from 2004 to 2023. The study identifies the key macroeconomic variables influencing the trade balance, including exchange rate, GDP, foreign direct investment, inflation, public expenditures, international reserves, and population growth. Using the ARDL model and ECM for short- and long-run analysis. The results reveal a significant and long-term co-integrated relationship between these variables and the non-oil trade balance. The findings underscore the negative effects of inflation and public spending on the trade deficit, and highlight the positive role of FDI and international reserves in improving trade performance. The study concludes with policy recommendations for promoting economic diversification and reducing dependence on oil revenues.