Abstract
The current empirical study addresses the recent economics of Saudi Arabia such as the uncertainty of economic growth and dependence on oil export. For this purpose, labor, capital, oil price, terrorism, military expenditure, tourism, and exports are added to the analysis. ARDL long-run and short-run analyses are used, and the results of the study have revealed that labor is negatively related to economic growth, which suggests that efforts should be done to reduce dependence on international labor through the installation of production facilities in those countries where labor is cheap. Also, it is noted that capital, tourism, and non-oil exports enhance economic growth, whereas oil price is the main problem for the economic growth of the country. These results suggest that the diversification of exports to non-oil products is a good strategy to boost economic growth. Alongside, domestic tourism should be promoted to enhance its share in economic activities. The current study helps the policy makers to open new earning avenues such as enhanced tourism sectors and modernized industries which help in technology exports.
Highlights
INTRODUCTIONThis article reviews the economic trajectories of Saudi Arabia since 2014 considering the issues of labor, capital, terrorism, tourism, oil prices, exports, and military expenditure; other macroeconomic factors are determinants of the overall economic performance
This article is designed to understand the contribution of key determinants to the economic growth of Saudi Arabia
There is no uniform way to measure the economic growth of a country, but some prime factors have been identified to affect the economic growth in Saudi Arabia
Summary
This article reviews the economic trajectories of Saudi Arabia since 2014 considering the issues of labor, capital, terrorism, tourism, oil prices, exports, and military expenditure; other macroeconomic factors are determinants of the overall economic performance. Tourism, terrorism, and military expenditure are considered interlinked factors that influence the economy simultaneously (Kollias and Papadamou, 2019) It has been observed in several empirical investigations that military expenditure has a positive influence on the economic growth, regardless of measurement techniques, growth rate, and government size. The study has a significant contribution in existing literature; previous studies consider the role of oil and exports in Saudi Arabia’s economic growth, whereas we emphasize that military measures and tourism are important for sustainable economic growth. The significance of military expenditure and the tourism sector needs to be addressed for shaping the long-term economic plans
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