Analysis of the determinants of aggregate import demand in Brunei Darussalam from 1964 to 1997

This study establishes the major factors that determined the level of aggregate imports for Brunei Darussalam during the period, 1964 to 1997. Brunei Darussalam is a small, oil rich nation in South East Asia. The country is characterized by a small population, a high per capita gross domestic product (GDP), and imports accounting for a high proportion of GDP. Ordinary least squares method was used to estimate the aggregate import demand as a function of the real effective exchange rate, real GDP and population. The results indicated that the real effective exchange rate, real GDP and population all significantly influenced the level of aggregate imports. Aggregate imports were both price inelastic and income inelastic but were elastic with regard to population.