Estimating the contribution of Saudi agricultural development fund to GDP and economic growth

Yosef A. Alamri (), Adel M. Ghanem () and Mohamad A. Alnafissa ()
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Yosef A. Alamri: King Saud University
Adel M. Ghanem: King Saud University
Mohamad A. Alnafissa: King Saud University

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2024, vol. 26, issue 11, No 70, 28877-28891

Abstract: Abstract Given the need of the Agricultural Development Fund to measure its contribution in a quantitative manner to agricultural and economic development, this research was aimed to estimate the relative importance of the contribution of Agricultural Development Fund on agricultural output, gross domestic product and economic growth rate of Saudi Arabia during the period 1990–2019, using econometric analysis and binomial probability distribution. The study showed the instability of both agricultural loans and economic growth rate during the study period, where the coefficient of variation reached 120.5% and 133.3% for each, respectively. The Agricultural Development Fund plays a significant role in the Saudi economy, as its contribution to agricultural output ranged between a minimum of 1.8% and a maximum of 27.0% at a 95% confidence level. The upper limit of the Agricultural Development Fund’s contribution on GDP was 2.81% at a confidence level of 95%. The upper limit of the Agricultural Development Fund’s contribution on economic growth rate was 0.115% at a confidence level of 95% during the study period. As for the contribution of the agricultural sector on the economic growth rate, it reached a maximum of 0.381% at a confidence level of 95% during the period 1990–2019. Finally, this study recommends the need for the Agricultural Development Fund to reconsider the lending policy so that it does not depend only on collection rates, in addition to preparing a study on local agricultural investment, so that it can take advantage of the relative characteristics of the productive areas and choose projects characterized by a high internal rate of return and its ability to raise Standard of living for the largest number of people. Increasing the lending rates to expand the number of productive projects to be established or expanding existing projects to increase the value added in the Saudi economy and then increase the contribution of the Agricultural Development Fund to the gross domestic product.

Keywords: Agricultural development fund; Agricultural output; GDP; Economic growth rate; Saudi Arabia (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10668-023-03847-0

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