Volatility of Oil Prices and Public Spending in Saudi Arabia: Sensitivity and Trend Analysis

Anis Ali
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Anis Ali: Department of Management, College of Business Administration, Prince Sattam Bin Abdulaziz University, Alkharj, Saudi Arabia.

International Journal of Energy Economics and Policy, 2021, vol. 11, issue 1, 165-172

Abstract: The export of petroleum products is the base avenue and constitutes a major ingredient of the Saudi economy. It is evident that the oil prices gradually decrease year by year governed by some international uncontrollable factors. The study is based on the secondary data obtained from the website of the Saudi Arabian Monetary Authority (SAMA). The study applies the Co-efficient of variation (CV), chain based (ICB) and fixed based (IFB) index numbers, correlation, and line diagram to get variability, movement, co-movement, and sensitivity and trends of the oil prices and dependent public spending avenues. The study reveals that the Saudi government enhances the level of their public spending while the oil prices lowering year by year. There is low positive sensitivity between oil prices and public spending while a negative trend between oil prices and public spending in long run. The shocks of the oil prices affect the public spending maintaining a certain gap between the growth s trends between of public spending and oil prices progressive order in long run. The trend reveals that the Saudi government basically focuses on education, health, and other community and social services while least on social security & welfare, and housing and community amenities services.

Keywords: Oil prices; public spending; sensitivity; trend analysis; Saudi Arabia (search for similar items in EconPapers)
JEL-codes: I10 I20 I30 Q40 Q41 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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