Saudi Arabia's unemployment rate nears Vision 2030 target

The unemployment rate in Saudi Arabia fell to 7.1% in the second quarter of 2024, edging closer to the Vision 2030 target of 7%. This marks the lowest level recorded since 2021, as reported by the General Authority for Statistics.

Unemployment among Saudi citizens continues to decline, dropping by 0.5 percentage points compared to the first quarter of 2024 and by 1.4 percentage points year-on-year from the second quarter of 2023.

The overall unemployment rate, which includes both Saudis and non-Saudis, also decreased to 3.3% during the same period, a 0.2 percentage point decline from the previous quarter and down by 0.8 percentage points compared to the second quarter of 2023.

Key factors behind unemployment decline

The reduction in unemployment can be attributed to several factors. Government-led development projects and increased public spending have generated thousands of job opportunities.

Furthermore, significant reforms have facilitated the entrance of a large number of Saudi women into the labor market.

Data from Q2 2024 revealed that the employment-to-population ratio for Saudi women rose by 0.1 percentage points to 30.8%, even as female labor force participation dropped slightly by 0.4 percentage points to 35.4%.

Notably, the unemployment rate for Saudi women saw a significant decrease of 1.4 percentage points, falling to 12.8% compared to the first quarter of 2024.

Strategic efforts to strengthen labor market

Saudi Arabia is prioritizing three key pillars to reach its target unemployment rates: Public Investment Fund (PIF) projects, the Saudization of jobs, and the private sector, according to Fadel Al-Buainain, a member of the Majlis Al-Shura.

Acoording to Bloomberg, Al-Buainain emphasized that PIF initiatives had created 644,000 jobs by the end of 2023, and the Saudization efforts are showing positive results. However, he noted that the private sector's contribution to job creation still lags behind expectations, indicating more work is needed to fully realize its potential.