Macroeconomic stability, fiscal management and food security in Saudi Arabia: A regime-switching analysis

This study examines the complex dynamics between macroeconomic variables and food security in Saudi Arabia using a semi-parametric Markov switching quantile process (MS-SQPF) model. Unlike traditional approaches, this model captures the nonlinearity and heterogeneity of responses across regimes by enabling the coefficients to change during unobserved periods of stability or recession. The results reveal asymmetries: while monetary policy has a significant positive effect, public spending can slow production during recessions but support it during stable periods. This highlights the value of targeted countercyclical interventions. Exchange rate depreciation boosts food security during slowdowns, but its impact is reduced during stable periods. Trade openness worsens food security during recessions but has no effect during stable periods, demonstrating vulnerability to external competition during crises. While per capita income supports food security during slowdowns, it can divert resources during periods of strong growth. Furthermore, population growth increases pressure on food demand, necessitating appropriate agricultural strategies. Finally, investment has no immediate effect, suggesting inefficiencies or delayed transmission mechanisms. These findings emphasise the need for an integrated, coordinated, and economically sensitive macroeconomic framework to strengthen the resilience of the agricultural sector and ensure long-term food sovereignty in Saudi Arabia.