Econometric Analysis and Forecasting of Wheat Production in Libya (2000–2035)

Abstract

Wheat production in Libya remains insufficient to meet growing domestic demand, increasing reliance on imports and exposing the country to external shocks. This study examines the structural economic determinants and future trajectory of wheat production using annual data from 2000 to 2023. The ARDL model is used to study the long-term and short-term relationships between wheat production and its main determinants, including barley production, wheat prices, barley prices, wheat imports, population size, and domestic demand. The boundary test results confirm a long-term equilibrium relationship (F = 9.34), while the error correction limit is negative and statistically significant (ECM = -0.72, p < 0.01), indicating that approximately 72% of short-term variances are corrected within one year. To generate reliable predictions independent of projections of extrinsic variables, the ARIMA model is applied according to the Box-Jenkins methodology. The optimal model, ARIMA (1,1,0), was selected based on the lower bound of the Akaike information Criteria. (AIC = -0.61). Diagnostic tests confirm the absence of a sequential correlation (LM test, p = 0.10) and the overall efficiency of the model. Forecast results indicate that wheat production is expected to Forecast results suggest that wheat production will remain relatively stable, fluctuating between approximately 130,000 and 132,70 tons annually through 2035 By integrating structural econometric analysis with univariate time-series forecasting, this study provides both economic interpretation and forward-looking evidence to support agricultural policy and food security planning in Libya.