The Impact of Non-Oil Exports on the Economic Growth in Saudi Arabia: An Empirical Analysis

This study aims to investigate the impact of non-oil exports on the economic growth of Saudi Arabia during the period 2000-2022. Since Saudi Arabia targets to transform their economy from dependence to the diversification of economic resources, it is important to evaluate the impact of non-oil exports on the gross domestic product (GDP) in the long run. This study used multivariate time series analysis, including Johansen-Juselius co-integration and Vector Error Correction Model to determine the long-run relationship between them. The findings of the study revealed that non-oil exports have a statistically significant impact on economic growth in the long run. However, oil exports have a negative relationship with economic growth in the long run. Moreover, it also observed that a real effective exchange rate negatively affects economic growth while gross capital formation has a positive impact on economic growth in the long run. It is recommended that the non-oil sectors should be considered as a prime concern regarding infrastructural development due to their instant return to the country and should provide loans at minimal or zero interest to support them in the effective production of non-oil exports. Moreover, also makes legislation in the favor of domestic and foreign stakeholders so that they can encourage them to invest in non-oil exports and expand the non-oil sector.