Identifying the key sectors for the Saudi economy : a social accounting matrix multiplier approach

Abstract EN

This study aims to identify the key and leading productive sectors of the Saudi economy using the social accounting matrix (SAM) multiplier approach.

An analysis of matrix multipliers allows the identification of backward and forward linkages between different sectors of the Saudi economy, and hence the key and leading sectors based on the greater value of those linkages.

The study identified four key and leading sectors of the Saudi economy with significant backward and forward linkages: manufacturing, wholesale and retail, transport, communications and storage, real estate, renting, and business activities.

Although the crude oil and natural gas sector is the largest in Saudi Arabia, accounting for about 50 percent of the economy's GDP, the backward and forward linkages are weak.

Using the sector weight methodology in total production share, the crude oil and natural gas sector has moved from its position as a weak sector to a key sector.

The real estate, renting, and business activities sector have moved from being a key sector to be backward sector-oriented.

The results are useful and essential because they provide a better understanding of how the impact of investing within a complex economic structure.

In doing so, it helps decision-makers and policymakers to identify priorities with the most significant positive impact on the economy.