RIYADH: A Saudi energy think tank said that greater private sector involvement in funding and delivering projects would spur the non-oil economy in Saudi Arabia.

It is one of five key recommendations in a paper published by the King Abdullah Petroleum Studies and Research Center that could maximize the impact of government spending on the economy beyond oil.

It also highlighted the need to improve Saudi Arabia’s business environment, involving the private sector in investment and job creation projects, and working on reprioritizing government spending, increasing local content and reducing imported goods and services.

The study concluded that government expenditure would have a greater positive impact if it was underpinned by investment in education, vocational training and capacity building.

Regional governments are accelerating their economic diversification agendas as they respond to a six-year period of weaker oil prices that deteriorated further in the last four months as the coronavirus pandemic smothered demand for gasoline and aviation fuel.

Moody’s expects the Saudi economy to grow at an average rate of around 3 percent during 2021-24, which is nearly double the average during 2015-19 (1.6 percent) but lower than the 4.1 percent growth rate recorded during 2005-14.