Inflation’s Impact on Sudan Exports 1990-2020: An ARDL Approach, Dr. Ali Aliraqi, Zobida Salih
Dr. Ali Aliraqi
Associate Professor of Economics, King Saud University
Email: email@example.com; firstname.lastname@example.org
Assistant Professor of Economics and Head Economics Department, Holy Quran University, Wad Medani
Exports have played a significant role in economic growth; therefore, rising exports will help increase aggregate demand and cause higher economic growth because it improves the balance of payments, employment, and living standards. This is why several governments attempt to remove barriers and encourage export performance. Primarily, export promotion begins with identifying determinants, variables, and their pattern of relationship in the country. Exports stand as the strategic programme for Sudan. Therefore, it needs more in-depth analysis for determinants, relationships, and direction.
Purpose: This study investigates the inflation-export nexus in Sudan over the period 1990- 2020.
Design/methodology: The study is based on quantitative and qualitative methods, estimating the export function and measuring the impact of its determinants over a prolonged period of time; the Autoregressive Distributed Lag (ARDL) methodology was used to analyse the co-integration.
Findings: Findings have undoubtedly shown inflation’s negative impact on exports over the period 1990-2020. Broadly speaking, the long-term results indicated that the most important variable affecting exports is the gross domestic product (GDP), followed by inflation. Interestingly, the results indicated that the exchange rate was not significant, neither in the short nor in the long term.
Implications: The study recommends inflation's control policy as a perquisite for an export development strategy; this overcomes barriers and paves the road for shifting Sudan's economy to productive agendas. Therefore, targeting inflation will contribute to export diversification and strengthening the product's value chain. The research findings reconsider the weight of export’s determinants and will reposition focusing to inflation control rather than exchange rate policy.
Originality/value: The paper introduces a new approach in modelling the inflation-export nexus: (1) elaborate on export's determinants and their weights; and (2) recommending guidelines to adapt inflation policy with export development strategy.
Keywords: Export, Inflation, Sudan economy, ARDL.