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Statistical Assessment of Financial Stress and Saudi Government Revenue |
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PP: 561-568 |
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doi:10.18576/jsap/140606
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Author(s) |
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Abdallah Sayed Mossalem Ahmed Elshafei,
Sherif A. Kaamoosh,
M. M. Abd El-Raouf,
M. A. El-Qurashi,
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Abstract |
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| This study examines the complex interplay between financial stress and Saudi Arabian government revenue from 2001 to 2023, considering the influence of key macroeconomic variables. Saudi Arabia’s heavy reliance on oil exports makes its public finances vulnerable to global economic shocks and fluctuations in oil prices. Financial stress, as measured by a composite indicator that includes GDP per capita growth, inflation, broad money growth, oil prices, unemployment, and government revenue, is analyzed using a Vector Error Correction Model (VECM) to look at both short-term fluctuations and long-term equilibrium relationships. The results demonstrate a substantial correlation between government revenue and financial stress, with broad money growth and unemployment having negative effects, and oil price volatility, inflation, and GDP per capita growth all having positive effects. The variables are co-integrated, according to the VECM analysis, suggesting a stable long-term equilibrium. Diagnostic tests demonstrate the reliability of the model. In order to maximize government revenue in Saudi Arabia, the research highlights the need for proactive policies that promote economic diversification, control inflation, and maintain stable employment levels. It also emphasizes the importance of effective measures to manage oil price volatility and mitigate the effects of global financial stress. |
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