Diversification in sight? A macroeconomic assessment of Saudi Arabia’s vision 2030

Flavien Moreau and Zamid Aligishiev

International Economics, 2024, vol. 180, issue C

Abstract: Saudi Arabia, currently the world’s largest oil exporter, embarked since 2021 on a large-scale National Investment Strategy (NIS) designed to lift potential GDP growth by diversifying the economy. This article describes the strategy and is the first paper that quantifies its impact on growth using a dynamic general equilibrium model. It also decomposes this impact into two main channels: the direct impact of the investment push and the impact of complementary reforms. We find that the overall strategy – when supported by appropriate fiscal measures, labor supply reform, and higher public sector efficiency – could boost potential non-oil growth by 4.8 percentage points to about 8.8 percent in the medium term. We also assess the growth dividends of a wider range of alternative scenarios around the NIS baseline.

Keywords: Economic diversification; Public investment; Potential GDP growth; Sovereign wealth funds; DSGE (search for similar items in EconPapers)
JEL-codes: E1 E2 F4 H5 Q3 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S2110701724000611
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:inteco:v:180:y:2024:i:c:s2110701724000611

DOI: 10.1016/j.inteco.2024.100538

Access Statistics for this article

International Economics is currently edited by Valerie Mignon and Marcelo Olarreaga

More articles in International Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().