Mohammed A. Aljebrin
Purpose: Developing countries give more importance to financial sector development with a goal of poverty reduction. Saudi Arabia gives more importance to financial sector development with a goal of poverty reduction. The study aims to determine impact of saving and bank claims on the private sector on economic growth to utilize it for raising the economic growth rate in the future. It provides new evidence on the impact of saving and bank claims on the private sector.
Methodology: The study has examined the economic growth of the private sector in Saudi Arabia for bridging the gaps found in theoretical and empirical aspects. The Ordinary Least Squares (OLS) approach and Co integration techniques during the period (1973-2017) were used.
Findings: The results indicated that there exists a positive and significant relationship among the real GDP, all the real domestic saving and the real bank claims on the private sector in both the short and long run. It concludes that if Saudi Arabia desires for economic growth so there should be an increase in the real domestic saving and real bank claims.
Originality: Financial systems need to be properly developed and functioned. Accordingly, the policymakers can formulate monetary policy to get the desired results.