The Impact of the Financial Sector Development Program 2030 on the Saudi Economy

أثر برنامج تطوير القطاع المالي 2030 على الاقتصاد السعودي

Abstract

     This study examines whether Saudi non-oil growth changed around the introduction of the Financial Sector Development Program (FSDP), whether banking and capital-market activity are associated with subsequent growth, and whether constrained machine learning improves prediction. Using official data for 2010Q1–2025Q4, an interrupted time-series model with a 2018Q2 introduction date, macroeconomic controls and pandemic indicators is estimated with HAC inference, block bootstraps and sensitivity checks. The 62-observation baseline estimates a trend change of 0.094 percentage points per quarter (95% HAC interval [0.047, 0.141]); the immediate shift is imprecise, and evidence weakens with an additional lag, shorter samples and aggregate GDP. Credit and turnover specifications do not establish stable positive associations. In retrospective forecast comparisons, ridge regression and random forests do not reliably outperform simple benchmarks, and financial predictors add no consistent accuracy. The findings support a conditional program-period change in the non-oil growth trajectory, without isolating an FSDP-caused gain.