Evaluation of Iranian Economic Sectors Vulnerability due to Import Constraint: Application of Social Accounting Matrix

According to statistical data, Iran’s average imports for the 5year period ending in 2014 were around 70 billion dollars. More importantly, foreign exchange needs due to the volume of imports, are not secured based on a diversified export portfolio. Hence, the main issue here is to evaluate the vulnerability of economic sectors to import constraint. To address this issue, it is required to compute the internal social accounting matrix (SAM) in which, imports are separated from production account. In this study, the extend of direct, indirect and induced dependencies of economic sectors on imports and output multipliers are calculated, by using 2011’s social accounting matrix, provided by the Research Center of Iranian Parliament. The results indicate that imports dependency, not only reduces the output multipliers but also changes the priority of economic sectors regarding output exponent. Furthermore, industry’s sub sectors are more vulnerable to import constrains, due to higher dependency on imports, compared to other sectors. In addition, crop and forestry, manufacture of fabricated metal products and motor vehicle and trailer manufacturing sectors with 0.616, 0.544 and 0.519 decrease in their multipliers, respectively, were subjected to the highest declines. And finally, manufacture of motor vehicles, trailers and semi-trailers (with a direct dependence coefficient of 0.1379 and direct, indirect and induced dependence coefficient of 0.2367), manufacture of rubber and plastics products (with a direct dependence coefficient of 0.1337 and direct, indirect and induced dependence coefficient of 0.2128) and manufacture of fabricated metal products (with direct dependence coefficient of 0.1168 and direct, indirect and induced dependence coefficient of 0.2112) have the highest dependencies on imports.