The Effect of National Income on Goods Imports in Saudi Arabia: Using Time Series Data

Abstract

This study investigates the relationship between national-income and goods - imports in Saudi Arabia, a country heavily reliant on oil exports and actively pursuing economic diversification as part of its Vision 2030 plan. Utilizing annual time series data from 2002 to 2023 sourced from the World Bank and Statista, the research examines the impact of national-income, inflation, and oil - prices on goods - imports. These imports are crucial for modernizing infrastructure and enhancing industrial capacity. The research employs econometric techniques, including unit root tests, cointegration analysis, and regression modeling, to understand how these factors interact and influence import patterns in Saudi Arabia. The analysis also explores the long-run equilibrium relationships among the variables and assesses the quality of the model through residual diagnostics and variance inflation factor (VIF) analysis. The findings provide valuable insights for policymakers aiming to manage import flows, promote domestic production, and ensure sustainable economic development in the post-oil era.