Analysis of the Relationship between Domestic Savings and Domestic Investment in Saudi Arabia

Abstract

This study aims to examine the relationship between domestic savings and domestic investment in Saudi Arabia for the period 1980-2019. The study uses annual data and employs the simple linear regression model and EViews program for analysis. The results show a positive direct relationship between domestic savings and domestic investment, with approximately 25% of the total domestic investments in the study period attributed to changes in the volume of Saudi financial savings. The study also reveals that other economic variables contribute more significantly to the levels of domestic investment. The findings suggest that Saudi policymakers should focus on increasing the volume of financial savings and implementing policies that encourage domestic investment to boost economic growth. The study has certain limitations, and future research should explore the impact of other economic variables on domestic investment in Saudi Arabia.