Forewarned is forearmed: Forecasting expansions and contractions of the Saudi Economy

Authors : Pierre ROSTAN, Alexandra ROSTAN, Mohammad NURUNNABİ

Pages : 178-190

View : 28 | Download : 39

Publication Date : 2023-06-30

Article Type : Research Paper

Abstract :In this study, it is tried to determine the expansions and contractions of the Saudi economy between 2021 and 2060. The Saudi economy being oil-driven, the special relationship between oil price and Saudi Real GDP is unfolded with Multiscale Principal Component Analysis insert ignore into journalissuearticles values(MPCA); combined with wavelet analysis. Assuming two scenarios with and without MPCA, the more likely midpoint scenario returns a 2021-2060 average of the Real GDP annual growth rate of - 0.37%. Saudi Arabia is benchmarked to Iran. 2021-2060 estimates of oil price forecast a rebound after 2020 that will pull up Saudi Arabia’s GDP. However, in 2031, Saudi Arabia’s and Iran’s GDP growth rates will diverge, Iran’s growth rate remaining in positive territory until 2044, whereas Saudi economy enduring a lengthy recession until 2048. After 2048, the two economies will emerge from recession but will eventually return to it before 2060.
Keywords : Dalgacık Analizi, Çok Ölçekli Temel Bileşen Analizi, Suudi Arabistan