Abstract
The last decade has brought a row of substantial changes that have profound implications for the hydrocarbon resource-rich economies. The general answer to a changing environment is: Adapt! From the macroeconomic perspective, this means diversifying the economy to broaden the income base and reduce the dependence on oil revenues. This discussion paper examines the preferred diversification paths for the Saudi economy, with a focus on the foreseen adjustments in the sectoral composition along with broader macroeconomic shifts. The evaluation of the expected diversification impacts is based on the updated Vision 2030 Input-Output Table that maps the changing economic structure over the coming decade. The advances in economic diversification are measured by applying the Shannon-Weaver index to sectoral GDP and household income. We also conduct a sensitivity analysis to examine the effects of the foreseen diversification on the resilience of the Saudi economy to external shocks.
