Saudi unemployment marks second straight jump in economic blow
The overall data indicates that a lot of people are just not entering the workforce: bank chief economist
[RIYADH] Saudi Arabia’s unemployment rate rose for two consecutive quarters for the first time since 2018, signalling more challenging labour conditions as Crown Prince Mohammed bin Salman strives to transform the economy.
Joblessness among Saudis increased to 7.5 per cent in the three months till September from 6.8 per cent in the previous quarter, indicated data released on Monday (Dec 29). This marks a second straight increase and the highest level in a year, though the figure is still historically low.
The Saudi labour participation rate – which measures the number of working-age nationals who are employed – dipped to 49 per cent, the lowest since 2021. Participation among Saudi females also dropped.
“What’s notable is the unemployment rate rose while participation fell, with the overall data indicating that a lot of people are just not even entering the workforce,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
This may be down to factors including difficulty finding jobs, taking time off or citizens opting to enter training programmes, she said.
Malik also highlighted strength in job creation for non-Saudis, reflecting the need for the local workforce to upgrade skills and become more competitive.
The total unemployment rate – including Saudis and non-Saudis – rose slightly to 3.4 per cent from 3.2 per cent.
Saudi Arabia is focusing on creating jobs for its young population, as the kingdom looks to promote talent development and reduce local unemployment as part of its broad economic diversification agenda.
The labour market has been a bright spot for the so-called Vision 2030 plan over the last decade, with joblessness having reached a record low of 6.3 per cent earlier this year – about half of what it was when the crown prince set out to break the Saudi economy’s reliance on oil.
Momentum now appears to be stalling as Saudi Arabia’s market matures, and lower oil prices complicate efforts to invest in the local economy.
The kingdom recently revised its 2030 unemployment target to 5 per cent from 7 per cent.
“The easy part of bringing unemployment down is done,” Malik said. “The next phase is going to be more difficult, especially with the low oil price environment.” BLOOMBERG
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