Constructing a social accounting matrix for Saudi Arabia: sources and methods

ABSTRACT

Even though Saudi Arabia is the largest country in the Middle East, and despite the magnitude of its economy, there have been no attempts to build a social accounting matrix (SAM) for Saudi Arabia based on the country’s real, official data. Thus, this study documents the construction procedures of the 2017 SAM for Saudi Arabia using high-quality official statistics. The procedures can be divided into two main steps. First, a highly aggregated macro-SAM is constructed. Second, the macro-SAM is disaggregated into a micro-SAM with the macro-SAM entries serving as control totals for sub-matrices of the micro-SAM. The results exhibit consistency and balance, which comprises a decent level of disaggregation for sectors via 54 accounts that are relevant for policy evaluation: 18 production activities, 18 commodities accounts, 4 factors of production, 10 institutions, and 4 other accounts. The resulting SAM is useful because it provides a consistent framework for socio-economic accounting of the Saudi economy.

KEYWORDS:

• Social accounting matrix
• national accounts
• computable general equilibrium model
• Saudi Arabian economy

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Here again, a mapping between economic activities in the labour force surveys and activities in the SUTs was necessary, given the difference in classification (Appendix B1).

2. The average wage derived from the surveys was monthly. It was subsequently annualized.

3. Here again, mapping was necessary between the two different classifications. The Economic Census uses the international standard industrial classification (ISIC) versus the CPA classification of the SUTs. See Appendix B2 for more details.

4. Non-Saudis were aggregated into a single category because of their distinct feature in the Saudi economy: their size, composition and distribution can vary substantially with economic conditions.

5. Note that the grouping was made according to household income, which may differ from grouping according to per capita income, since households may differ in size.

6. The SUTs commodity groups (shown in the Saudi SAM) followed the CPA classification of the European Union, while the 2013 HIES used the international CPC classification, which differed for some commodity groups. Thus, the mapping between the two classifications was necessary to obtain the shares in the Saudi SAM. Where one-to-one correspondence was not clear, the SUT proportions were used for guidance.