مهندسین مشاور طرح و تحقیقات آب و فاضلاب اصفهان مجله آب و فاضلاب 1024-5936 مقالات آماده انتشار 2026 05 05 ­­Macroeconomic Implications of Virtual Water Imports in Iran: A Vector Autoregression Analysis, 2003–2022 ­­Macroeconomic Implications of Virtual Water Imports in Iran: A Vector Autoregression Analysis, 2003–2022 243112 10.22093/wwj.2026.569748.3539 FA جبار پیری PhD. Candidate, Dept. of Economics, Arak Brach, Islamic Azad University, Arak, Iran 0009-0006-1495-1634 غلامعلی حاجی Assoc. Prof., Dept. of Economics, Arak Brach, Islamic Azad University, Arak, Iran 0000-0002-0329-9760 مریم شریف نژاد Assist. Prof., Dept. of Economics, Arak Brach, Islamic Azad University, Arak, Iran 0000-0002-7199-2946 رضا کیهانی حکمت Assist. Prof., Dept. of Economics, Qorveh Branch, Islamic Azad University, Qorveh, Iran 0000-0001-8289-2812 Journal Article 2025 12 30 Water scarcity is a critical challenge for the global economy in the 21^st century, particularly in arid and semi-arid countries such as Iran. Virtual water imports – the water embedded in imported goods – have emerged as an important mechanism to alleviate domestic water shortages. However, the macroeconomic implications of VWI remain underexplored, especially in resource-constrained economies. This study addresses this gap by analyzing the impact of VWI on key macroeconomic indicators in Iran over the period 2003–2022, including trade balance, GDP growth, government revenue, government expenditure, and foreign exchange reserves. To capture the dynamic interrelationships among these variables, the study employs a VAR model. The empirical strategy integrates both financial cost and opportunity cost perspectives to provide a comprehensive assessment of how VWI shocks propagate through the macroeconomic system. Standard time-series procedures, including unit root tests and information-criterion – based lag selection, are applied, followed by impulse response functions and forecast error variance decomposition to analyses the short – and long-run effects of VWI shocks. The estimation results indicate that VWI exerts a significant negative impact on Iran’s trade balance, with a first-lag coefficient of −0.18, and reduces foreign exchange reserves by 0.09% in the first period and an additional 0.04% in the second period. GDP growth is adversely affected, with a reduction of −0.11 in the first lag, reflecting resource misallocation and diminished economic efficiency. In contrast, VWI contributes positively to government revenue in the short run, with a first-lag coefficient of +0.13, highlighting short-term fiscal benefits. The variance decomposition results further show that VWI shocks account for approximately 47% of the long-run fluctuations in the trade balance and 36% of the variability in economic growth. The findings highlight the dual nature of VWI: while they help mitigate immediate water scarcity, they simultaneously impose significant long-term economic and external-sector trade-offs. For Iran and similar water-scarce economies, these results underscore the need to reduce structural dependence on VWI through investment in water-efficient technologies, enhancement of agricultural productivity, and broader economic diversification. Aligning such strategies with the Sustainable Development Goals can strengthen macroeconomic resilience, preserve foreign exchange reserves, and support sustainable long-term growth. Water scarcity is a critical challenge for the global economy in the 21^st century, particularly in arid and semi-arid countries such as Iran. Virtual water imports – the water embedded in imported goods – have emerged as an important mechanism to alleviate domestic water shortages. However, the macroeconomic implications of VWI remain underexplored, especially in resource-constrained economies. This study addresses this gap by analyzing the impact of VWI on key macroeconomic indicators in Iran over the period 2003–2022, including trade balance, GDP growth, government revenue, government expenditure, and foreign exchange reserves. To capture the dynamic interrelationships among these variables, the study employs a VAR model. The empirical strategy integrates both financial cost and opportunity cost perspectives to provide a comprehensive assessment of how VWI shocks propagate through the macroeconomic system. Standard time-series procedures, including unit root tests and information-criterion – based lag selection, are applied, followed by impulse response functions and forecast error variance decomposition to analyses the short – and long-run effects of VWI shocks. The estimation results indicate that VWI exerts a significant negative impact on Iran’s trade balance, with a first-lag coefficient of −0.18, and reduces foreign exchange reserves by 0.09% in the first period and an additional 0.04% in the second period. GDP growth is adversely affected, with a reduction of −0.11 in the first lag, reflecting resource misallocation and diminished economic efficiency. In contrast, VWI contributes positively to government revenue in the short run, with a first-lag coefficient of +0.13, highlighting short-term fiscal benefits. The variance decomposition results further show that VWI shocks account for approximately 47% of the long-run fluctuations in the trade balance and 36% of the variability in economic growth. The findings highlight the dual nature of VWI: while they help mitigate immediate water scarcity, they simultaneously impose significant long-term economic and external-sector trade-offs. For Iran and similar water-scarce economies, these results underscore the need to reduce structural dependence on VWI through investment in water-efficient technologies, enhancement of agricultural productivity, and broader economic diversification. Aligning such strategies with the Sustainable Development Goals can strengthen macroeconomic resilience, preserve foreign exchange reserves, and support sustainable long-term growth. https://www.wwjournal.ir/article_243112_547f069720e09e5e2a050cb5997d812b.pdf