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

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  • Anis Ali

    (Department of Management, College of Business Administration, Prince Sattam Bin Abdulaziz University, Alkharj, Saudi Arabia.)

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.

Suggested Citation

  • Anis Ali, 2021. "Volatility of Oil Prices and Public Spending in Saudi Arabia: Sensitivity and Trend Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 165-172.
    • Handle: RePEc:eco:journ2:2021-01-21
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    References listed on IDEAS

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    Cited by:

    1. Sugra Humbatova, 2023. "The Impact of Oil Prices on State Budget Income and Expenses: Case of Azerbaijan," International Journal of Energy Economics and Policy, Econjournals, vol. 13(1), pages 189-212, January.

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    More about this item

    Keywords

    Oil prices; public spending; sensitivity; trend analysis; Saudi Arabia;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I20 - Health, Education, and Welfare - - Education - - - General
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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