Vol: 15, Issue: 3 2025

Page: 172-180

Estimating the Impact of Oil Prices on Inflation Dynamics: Evidence from Oil-Importing Economies - Middle East and North Africa

Dr. Esam Hadi Muhammad Al Salhi, Dr. Salam Anwar Ahmed

Received Date: 2025-07-07

Accepted Date: 2025-09-08

Published Date: 2025-09-11

http://doi.org/10.37648/ijtbm.v15i03.012

The study examines the effect of global oil prices on inflation in the economies of the Middle East and North African (MNA), focusing on Egypt, Tunisia, Jordan and Morocco in the period 1990-2024. By using world development indicators and annual data from the World Bank's world development indicators and OPEC databases, an analysis appoints a panel Ardl model to investigate both short and long -lasting dynamics. Unit root and cointegration chair prices, real GDP, business openness and inflation confirm the presence of a long balance conditions. The results show that real GDP and business openness are strong and important determinants for inflation, which corresponds to the total demand pressure and imported inflation mechanisms. Conversely, oil prices show a negative and slightly significant impact, explained by the presence of energy grants and state interventions that reduce the immediate passage of the global oil price shock for domestic prices. Short -term effects were largely insignificant, while the term miscorrections confirmed the moderate adjustment to the long balance. The impulse response analysis suggests that the inflation effect of the oil price shock is intensified in the long term, which reflects delayed transmission of external cost pressure. The study concludes that inflation in oil-door MNA economies is mainly induced by domestic development and external trade addiction, rather than fluctuating direct oil value. These conclusions emphasize the importance of structural reforms, including subsidy rationalization, energy diversification and dependence on imported oil, and reduce addiction to strengthen flexibility and ensure long -term value stability.

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