Modeling the fruit production-GDP Nexus in Saudi Arabia: evidence from cointegration and vector error correction model techniques

Introduction Saudi Arabia's agricultural sector has undergone significant transformation over the past few decades, driven by government policies, technological advancements, and changing economic priorities. Despite environmental constraints, Saudi Arabia has achieved notable advances in fruit production; therefore, this study aims to analyze the long-run and short-run dynamics between fruit production and GDP in Saudi Arabia. Methods This study investigates the cointegration relationship between GDP and fruit production in Saudi Arabia using annual time series data over 1970–2023. The study applies the Vector Error Correction Model (VECM) to explore long and short-run dynamics. Results The results confirm a long-run equilibrium relationship among the variables. Grapes and dates production exhibit significant interactions with GDP in the short and long term, while watermelon production shows mixed effects but potential for long-term contribution. Moreover, the error correction term (ECT) confirmed that short-term disequilibrium between GDP and fruit production is corrected over time. Conclusion The GDP is self-driven but also influenced by grapes and dates production shocks. Forecasting performance was strongest for dates and watermelon production. The study recommends enhancing productivity through crop diversification, shifting to higher-value varieties, and improving market integration for dates production. Future research should incorporate variables such as climate change, trade policy, and input costs further to investigate the elasticity of watermelon production relative to GDP.