Economic effects of low oil prices in Saudi Arabia

Abstract

During the last two decades, the oil prices have fluctuated between a high of $146 and a low of $28 per barrel. Oil has traditionally been regarded as a stable commodity in the worldwide market. However, the decline of oil prices during 2015-18 had hit the oil exporting countries very hard, which had pushed many countries to the brink of economic collapse or at least recession. As we can sense, oil prices are closely watched by policymakers, investors, and economists. Saudi Arabia is the largest exporter of the oil to many countries of our planet. The decline in energy prices had forced the Saudi Arabia government to incorporate structural, economic and fiscal reforms that focused on improving sustainability, transparency, project development and public finances in 2016 annual budget. This research study aims at investigating the economic effects of low oil prices and government austerity in Saudi Arabia. This study uses a case study approach, a questionnaire and analysis of its responses SPSS. A well-structured questionnaire was developed and distributed to different public offices, university students, shopping centers, and malls in Saudi Arabia. Also, this research has studied various databases and performed a systematic literature review of some articles and journals published between 2018 and 2019.