An analysis of the effects of oil and non-oil export shocks on the Saudi economy

  • Received December 25, 2022;
    Accepted February 7, 2023;
    Published February 13, 2023
  • Author(s)
    Uzma Khan
    ORCID Researcher ID ,
    Aarif Mohammad Khan
    ORCID
  • DOI
    http://dx.doi.org/10.21511/imfi.20(1).2023.12
  • Article Info
    Volume 20 2023, Issue #1, pp. 127-137
  • TO CITE АНОТАЦІЯ
  • Cited by
    1 articles
  • 560 Views
  • 331 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License

As the world’s largest oil exporter, Saudi Arabia faces the same pressures as any other government to expand its economy. Saudi Vision 2030 is to reduce the country’s reliance on oil exports and revenues. One of the main goals of Saudi Vision 2030 is to increase the share of GDP that does not come from oil. Dynamic autoregressive distributed lag (ARDL) cointegration is used to look at how oil exports and exports of goods other than oil affect GDP growth. The results of the dynamic ARDL simulation show that there is both long-term and short-term cointegration between the variables. The dynamic ARDL simulation tests rely on the presence of cointegration to show that a 1% increase in oil exports will boost Saudi Arabia’s economic growth by about 0.48% in the long run and 0.18% in the short run, depending on the type of time frame. In the same way, the results about non-oil exports showed that an increase in non-oil exports would boost Saudi Arabia’s economic growth by 0.26 percentage points in the long run and by 0.16 percentage points in the short run. This is a good sign of Saudi Arabia’s efforts to diversify its economy away from oil exports and make room for international investors to help the country reach its Vision 2030 goals.

Acknowledgment
This study is supported via funding from Prince Sattam bin Abdulaziz University project number (PSAU/2023/R/1444).

view full abstract hide full abstract
    • Figure 1. ± 10% shocks in oil export
    • Figure 2. ± 10% shocks in non-oil export
    • Table 1. Descriptive statistics
    • Table 2. Correlation matrix
    • Table 3. Unit root test results
    • Table 4. Bound test for ARDL
    • Table 5. Dynamic ARDL simulations
    • Investigation
      Uzma Khan
    • Supervision
      Uzma Khan
    • Writing – original draft
      Uzma Khan
    • Writing – review & editing
      Uzma Khan
    • Conceptualization
      Aarif Mohammad Khan
    • Data curation
      Aarif Mohammad Khan
    • Formal Analysis
      Aarif Mohammad Khan
    • Methodology
      Aarif Mohammad Khan
Related Articles

  • Impact on poverty and income inequality in Malaysia’s economic growth

    Rabiul IslamORCID Researcher ID, Ahmad Bashawir Abdul Ghani , Irwanshah Zainal Abidin , Jeya Malar Rayaiappan doi: http://dx.doi.org/10.21511/ppm.15(1).2017.05
    Problems and Perspectives in Management Volume 15, 2017         Issue #1         pp. 55-62 Views: 12038 Downloads: 5746 TO CITE АНОТАЦІЯ

    Poverty and income inequality are extreme issues that still exist in Malaysia. Any rise in poverty and income inequality definitely affect economic growth. There are many great efforts taken by the government of Malaysia to eradicate poverty and to reduce the gap of income inequality which occurs since 1970’s. The incidence of poverty and income inequality is higher in rural areas compared to urban areas. This paper is mainly to study the level of poverty and income inequality in Malaysia together with government intervention to develop Malaysia’s economic growth. The research is focused among the working people at Ipoh, Perak. In this paper, questionnaire forms are being distributed to get information regarding the issue of poverty and income inequality. It also looks into the strategies taken by the government of Malaysia to eradicate poverty and income inequality. Few recommendations are given in terms of education policy, financial aid and assistance from government and non-government organization (NGO) to upgrade the standard and quality of living among the poor and lower-income group of people.

  • Impact of inflation on economic growth: evidence from Nigeria

    Anthony Olugbenga AdaramolaORCID , Oluwabunmi Dada doi: http://dx.doi.org/10.21511/imfi.17(2).2020.01
    Investment Management and Financial Innovations Volume 17, 2020         Issue #2         pp. 1-13 Views: 9348 Downloads: 5625 TO CITE АНОТАЦІЯ

    In an attempt to examine the influence of inflation on the growth prospects of the Nigerian economy, the study employs the autoregressive distributed lag on the selected variables, i.e. real gross domestic product (GDP), inflation rate, interest rate, exchange rate, degree of economy`s openness, money supply, and government consumption expenditures for the period 1980–2018. The study findings indicate that inflation and real exchange rate exert a significant negative impact on economic growth, while interest rate and money supply indicate a positive and significant impact on economic growth. Other variables in the model depict no influence on the economic growth of Nigeria. The causality result shows the unidirectional relationships between interest rate, exchange rate, government consumption expenditures and gross domestic product. However, inflation and the degree of openness show no causal relationship with gross domestic product. As a result, the study recommends that a more pragmatic effort is needed by the monetary authorities to target the inflation vigorously to prevent its adverse effect by ensuring a tolerable rate that would stimulate the economic growth of Nigeria.

  • Formalization of the impact of imbalances in the movement of financial resources on economic growth of countries in Central and Eastern Europe

    Serhiy KozmenkoORCID , Maxim KorneyevORCID Researcher ID doi: http://dx.doi.org/10.21511/afc.01(1).2017.06
    Accounting and Financial Control Volume 1, 2017         Issue #1         pp. 48-58 Views: 7973 Downloads: 1381 TO CITE

    The article deals with the impact of financialization on economic growth in countries of Central and Eastern Europe. It determinesthe impact of imbalances in the movement of financial resources caused by financialization on economic growth of these countries. It proves that the implementation of measures aimed at increasing the openness of the economy and maintaining solvent demand have a positive impact on economic growth of the surveyed countries in the long run. It also proves the importance of developing a set of measures of strategic nature regulating imbalances in the movement of financial resources caused by financialization.

Download Preview
Close
Investment Management and Financial Innovations
Investment Management and Financial Innovations