Abstract

Objectives: The study aimed to test the relationship between the informal economy and economic growth in Saudi Arabia during the period 1991-2023. Methods: The study relied on the descriptive method and the standard approach based on statistical analysis to determine the relationship between the variables based on the OLS method and the ARDL autoregressive distributed lag model. The ARIMA model was also applied using Eviews to predict the size of the informal economy in the Saudi economy. Results: The study found a positive direct relationship between the informal economy and economic growth in the Kingdom. The study also concluded that technological development plays an effective role in confronting informal activities. Conclusions: The results of the study contributed to providing recommendations for taking measures and procedures to regulate individual practices in the informal economy and understanding the nature of its contribution to the Saudi economy by containing individual producers from informal labor to correct their path, avoid wasting their resources, and increase the benefit from their production opportunities as an engine for economic growth in the Kingdom, in addition to using advanced technical products and programs for their positive role in confronting the increase in the size of the informal economy.