Abstract

This study investigates the impact of private and public investments on non-oil economic growth in Saudi Arabia. Analyzing data from 1980 to 2022 and employing a co-integration approach to identify significant relationships between non-oil GDP and various macroeconomic variables, we find that private investment significantly influences economic growth compared to public investment. Factors such as efficiency, privatization initiatives, and market responsiveness contribute to this result. Policymakers should prioritize creating an enabling environment for private sector development, fostering innovation, enhancing access to finance, and promoting entrepreneurship. Additionally, policies targeting public investment should complement private sector initiatives, fostering an environment where both sectors thrive and contribute to sustained growth. This study underscores the importance of research-based policy approaches that leverage the strengths of each sector to maximize economic potential and optimize resource allocation.

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