Open AccessGlobal Economic Shock Spillovers to the Saudi Economy: An Assessment Framework
Author(s) -
Hend M. Alsheikh Hend M. Alsheikh
Publication year - 2015
Publication title -
maǧalaẗ ǧameʼaẗ al-malīk abdul aziz. al-iqtiṣad wa al-idaraẗ
Language(s) - English
Resource type - Journals
ISSN - 1319-0997
DOI - 10.4197/eco.29-1.8
Subject(s) - spillover effect , shock (circulatory) , financial crisis , market liquidity , vulnerability (computing) , financial market , economics , government (linguistics) , inflation (cosmology) , business , interest rate , monetary economics , finance , macroeconomics , medicine , linguistics , philosophy , physics , computer security , theoretical physics , computer science
This paper introduces a framework for assessing globalshock spillover specifically address the global financial spilloversto the Saudi economy by exploring the main fundamentaldeterminants of creditworthiness including key global factors,Macroeconomic and Financial Sector vulnerability. Finallyhighlights the extent to which the Saudi financial system havebeen able to regain a sound standing in the aftermath of the recentfinancial crises to which they have been subjected. The mainconclusion is that global financial crisis has had limited directimpact so far on domestic financial markets but, the country wasand still effected through trade, reflected in high inflation rate,tighter liquidity and weak investor confidence. Governmentgenerous spending has been successful in reducing the impact ofthe global crisis, but Saudi Arabia should adopt alternative venueto the current high spending levels. In light of anticipated fall inoil prices, the current strategy is not sustainable.