IN THE NAME OF
GOD
FORECASTING THE CHANGE OF TRADING PARTNERS OF
IRAN WITH EMPHASIS ON CONTINUING SANCTIONS IN
HORIZON OF FIFTH DEVELOPMENT PROGRAM
Summer 2014
Summary of this study
Non-oil exports as a communication channels of Iran’s economy with the world is one of the factors
affecting on Iran’s economy, therefore, an extensive explore and study is needed that expand the
non-oil exports and diversify the country's export earnings, in order to reduce the vulnerability of
objectives of development’s economic of country is needed. In this paper an attempt has been to
review and forecast process of change Iran's major trade partners on non-oil exports from 1996 until
the end of the fifth development plan. For this purpose, share of the Iran’s trade partners from
export of agricultural products as part of the non-oil exports were studied by using the data of the
Customs Administration of Iran over the period 1996-2012, then process of change the trade
Partners since 2015 were predicted by using econometric techniques with regard to sanctions.
Mahdi Bastani and Ebrahim Ensan
Importance of Exports
The role and importance of the non-oil exports development, especially
the non-oil export in the process of economic development is widely
accepted. Export development providing currency resources for
economic development and can be determining role in shaping
economic structures, optimal allocation of resources, advantage of
economies of scale in production, access to international expertise and
etc.
IMPORTANCE OF EXPORTS
Exchange
Revenue
Export
has a
key
Creation of economic infrastructures
Optimal resource allocation
Use of economies of scale
role in: Having much more specialization
Non-oil Exports and Development Programs
During the first, second and third-economic developments program of the country,
condition of the Iran’s non-oil export were lower than expected, but in the fourth
development plan, non-oil export as an effective and key component in economic
development and also in preparation of the social and cultural infrastructure for
employing exports strategy has been emphasized, so in this respect the
performance of non-oil export is indicative of the success of policies adopted, so
that in the third development plan achieving the desired goals about 92%, and the
figures for the fourth development plan to nearly 149 percent.
This situation indicate that exports in the context of
development was risen and government policies have a
positive impact on exports trend, so that in end of the fifth
development plan was expected that the country's export had
to reach $ 300 billion.
To achieve a desirable level of development, in addition to
using internal facilities and resources, it is necessary to
establish economic and trade relations with other countries
will be more effective.
WHAT IS THE QUESTION?
• How will change the share of trading
partners in the future, if these sanctions
will continue?
FIVE CHOSEN PARTNERS
IN TRADE OF IRAN
Germany's share of agricultural products
export during the period 1996-2012
Source: Data released by the Islamic republic of Iran customs administration
Emirate’s share of agricultural products
export during the period 1996-2012
Source: Data released by the Islamic republic of Iran customs administration
Iraq's share of agricultural products export
during the period 1996-2012
Source: Data released by the Islamic republic of Iran customs administration
Hong Kong's share of agricultural products
export during the period 1996-2012
Source: Data released by the Islamic republic of Iran customs administration
Afghanistan's share of agricultural products
export during the period 1996-2012
Source: Data released by the Islamic republic of Iran customs administration
FORECASTING METHOD
• Stationary has been checked
ARIMA
by Dickey-Fuller test
• Assess the accuracy of
predictions based on the Mean
Double
exponential
smoothing
Forecast
methods:
Absolute Percentage Errors
criteria
ARIMAX
Single
exponential
smoothing
RESULTS AND DISCUSSION
Table 1. Unit Root Test Results
Test Results
Significant
Level
Amount of
Computational
Critical
Value
Test
Variables
I(1)
%1
-5.54
-4.72
ADF
HK
I(1)
%10
-3.53
-3.32
ADF
Irq
I(1)
%10
-3.60
-3.36
ADF
Afg
I(2)
%10
-3.64
-3.34
ADF
UAE
I(1)
%10
-3.83
-3.38
ADF
Ger
Error Percentage of Forecast in ARMAX Method
Outsourcer-sample
Forecast Error
Within-sample Forecast
Error
Forecasting Method
1.68 %
0.41 %
0.09 %
0.79 %
0.99 %
-
2.26 %
30.12 %
28.98 %
2.87 %
4.48 %
14.55 %
0.44 %
12.90 %
5.93 %
4.92 %
10 %
12.92 %
3.93 %
34.65 %
41.13 %
ARMAX (0, 0, 5)
single
double
ARMAX (2, 0, 5)
single
double
ARMAX (2, 0, 4)
single
double
ARMAX (1, 0, 2)
single
double
ARMAX (2, 0, 5)
single
double
Variable
HK
Irq
Afg
UAE
Ger
ADF Test Results for the Fitted Residual
t-Statistics
Residuals
-5.32*
Res HK
-7.49*
Res Irq
-4.24*
Res Afg
-8.78*
Res UAE
-5.92*
Res Ger
* Significant in 1%
Predicted Values ​ by the ARMAX Method
Mean
2015
2014
2013
Method
Variable
6.42 %
6.29 %
5.59 %
7.39 %
ARMAX)0,0,5(
HK
29.2 %
27.56 %
28.71 %
31.33 %
ARMAX)2,0,5(
Irq
7.38 %
7.09 %
7.39 %
7.68 %
ARMAX)2,0,4(
Afg
14.17 %
14.67 %
14.22 %
13.63 %
ARMAX)1,0,2(
UAE
4.81 %
5.23 %
4.75 %
4.45 %
ARMAX)2,0,5(
Ger
Policy implications to the government:
Identifying potential business opportunities in new markets and introduce
them to traders and merchants of private sector.
Trying to eliminate non-tariff barriers on the way to development of trade.
Trying to for the conclusion of "free trade agreements" with other
countries.
Thank you very much
for your attention