Saudi Arabia’s Improving Labor Market

• Hashim Sheikh
• . September 29, 2023
• . Update: September 29, 2023 3:06 pm
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Especially in terms of unemployment rates and labor force participation, Saudi Arabia, a major actor in the Middle East, is seeing a favorable trend in its labor market. According to official data, unemployment has significantly decreased, with a focus on rising female involvement. This article examines the most recent data and examines how these changes are impacting Saudi Arabia’s economy in line with its Vision 2030 plan to diversify and increase jobs.

Unemployment Rate Decline

Saudi Arabia’s overall unemployment rate, which includes both locals and foreigners, declined, according to the General Authority for Statistics( Gastat). The severance rate dropped to 4.9 in the second quarter of this year from 5.8 in the same quarter of last year. This illustrates the nation’s rising labor force participation trend. Also, the severance rate for Saudi citizens only was 8.3 in Q2, an enhancement over the 9.7 recorded in Q2 of the former time. 

Gender Dynamics

The rising percentage of women working is a  pivotal point of this trend. Because more women are sharing in the labor market, the severance rate for Saudi women has significantly fallen from 19.3 to 15.7 during the past year.  In contrast, the unemployment rate for Saudi men decreased slightly year over year from 4.7% to 4.6%, indicating a steady trend.

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Economic Impact

The Saudi Arabian economy is anticipated to profit greatly from the growing involvement of women in the labor force. According to S&P Global Ratings, the profitable impact of increased female labor participation might reach $ 39 billion by 2032 if the current growth rate is maintained. This emphasizes the transformational eventuality of including more women in the workforce and is harmonious with the larger ambitions of Vision 2030. 

Vision 2030 and Economic Diversification

Saudi Arabia’s Vision 2030 intends to diversify the economy of the country and reduce its reliance on oil. The government has launched several initiatives, including programs and reforms, to promote economic expansion and employment creation. This aim includes, as shown by recent encouraging developments, bringing down the unemployment rate to 7% and encouraging more women to enter the workforce.

Promising developments towards the objectives specified in Vision 2030 can be seen in Saudi Arabia’s progress in lowering the unemployment rate and promoting increased female involvement in the The kingdom is positioned for long-term economic growth and prosperity through diversifying its economy and utilising the potential of its entire workforce.