Oil Price, Revenues and Expenditures in Saudi Arabia

Abstract

The increase in the price of crude oil is critically important for economic development. Crude oil is not only an important resource for production, but also accounts for a large proportion of the expenditure of private households as well as public sector. Saudi Arabia, which produces 9.5 million barrel per day, is considered the largest exporting country in the world, which represents 90% of its budget. Therefore, this fluctuation in the price of crude affects the government budget. This study aimed to examine the relation between the continuous price change and revenues and the whole impact in government expenditures during the period 2003-2014 in Saudi Arabia. Different statistical techniques were used to show the aforementioned relation. However, the study found that there is an adverse relationship between oil price and government expenditures in Saudi Arabia during the period of the study.

Key words: oil Price, Saudi Economy, Government Expenditures