Saudi Unemployment Declines, Approaching Government Targets

One of the job fairs in Saudi Arabia that brings job seekers together with companies (Asharq Al-Awsat)
One of the job fairs in Saudi Arabia that brings job seekers together with companies (Asharq Al-Awsat)
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Saudi Unemployment Declines, Approaching Government Targets

One of the job fairs in Saudi Arabia that brings job seekers together with companies (Asharq Al-Awsat)
One of the job fairs in Saudi Arabia that brings job seekers together with companies (Asharq Al-Awsat)

The unemployment rate among Saudis, during Q2 of 2023, decreased to 8.3%, marking a notable decline from the 9.7% recorded in the corresponding period in 2022.

This development aligns more closely with the ambitious target set by the Saudi government in its “Vision 2030” initiative, which seeks to achieve a 7% unemployment rate in the Kingdom.

Progress in reducing the rate of joblessness in the Kingdom can be traced back to the government’s steadfast commitment to addressing unemployment issues among both Saudi men and women by actively fostering increased job prospects within the local job market.

In Q1 of 2023, the unemployment rate among Saudis stood at 8.5%, but it dropped to 8.3% in Q2 thanks to government programs, initiatives, and decisions aimed at localizing a number of jobs within its labor market reform measures.

The Saudi Human Resources and Social Development Ministry is intensifying its efforts to localize several sectors within the Saudi market.

It is doing so through various initiatives aimed at supporting private sector establishments, which are expected to have a positive impact on unemployment rates for the overall population.

The ministry’s workforce-supporting strategy has played a role in reducing the overall unemployment rates.

Aligning with the Kingdom’s objectives of empowering women and enhancing their economic participation, the ministry'’ efforts have yielded an unprecedented reduction in the unemployment rate among Saudi women in Q2, 2023, reaching 15.7% compared to 19.3% in the same period in 2022.

A recent report by S&P Global showed that labor market reforms in Saudi Arabia have nearly doubled the women’s labor force participation rate in the country from approximately 19% in 2016 to nearly 36% in 2022.

As a result of measures aimed at improving access to the labor market requirements and the effectiveness of policies involving young Saudi talents in various fields, an official report showed that the participation rate in the labor force for the total Saudi population (males and females aged 15 and above) in Q2, 2023, is approximately 51.7%.

This figure remains largely stable compared to 52.4% in the previous quarter.

It is worth noting that Saudi Arabia’s Human Resources Development Fund has contributed to supporting 1.4 million Saudis through training, empowerment, and guidance programs during the first half of 2023.

Approximately 79,000 establishments across various regions of the kingdom have benefited from the fund’s support, with about 95% of these establishments falling under the category of medium, small, and micro-sized enterprises.

Saudi Shura Council member Fadel al-Buainain told Asharq Al-Awsat that fluctuations in the unemployment rate on a quarterly basis are expected due to economic and commercial variables, as well as changes in the labor market.

Buainain believes that such relative fluctuations during a quarter help direct efforts and address any issues if they arise or enhance gains.

He explained that during the current year, the unemployment rate rose to 8.5% in Q1, then decreased to 8.3% in Q2, indicating that there have been corrective measures and improvements within a span of three months.



Saudi Non-Oil Exports Hit Two-Year High

The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
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Saudi Non-Oil Exports Hit Two-Year High

The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)

Saudi Arabia’s non-oil exports soared to a two-year high in May, reaching SAR 28.89 billion (USD 7.70 billion), marking an 8.2% year-on-year increase compared to May 2023.

On a monthly basis, non-oil exports surged by 26.93% from April.

This growth contributed to Saudi Arabia’s trade surplus, which recorded a year-on-year increase of 12.8%, reaching SAR 34.5 billion (USD 9.1 billion) in May, following 18 months of decline.

The enhancement of the non-oil private sector remains a key focus for Saudi Arabia as it continues its efforts to diversify its economy and reduce reliance on oil revenues.

In 2023, non-oil activities in Saudi Arabia contributed 50% to the country’s real GDP, the highest level ever recorded, according to the Ministry of Economy and Planning’s analysis of data from the General Authority for Statistics.

Saudi Finance Minister Mohammed Al-Jadaan emphasized at the “Future Investment Initiative” in October that the Kingdom is now prioritizing the development of the non-oil sector over GDP figures, in line with its Vision 2030 economic diversification plan.

A report by Moody’s highlighted Saudi Arabia’s extensive efforts to transform its economic structure, reduce dependency on oil, and boost non-oil sectors such as industry, tourism, and real estate.

The Saudi General Authority for Statistics’ monthly report on international trade noted a 5.8% growth in merchandise exports in May compared to the same period last year, driven by a 4.9% increase in oil exports, which totaled SAR 75.9 billion in May 2024.

The change reflects movements in global oil prices, while production levels remained steady at under 9 million barrels per day since the OPEC+ alliance began a voluntary reduction in crude supply to maintain prices. Production is set to gradually increase starting in early October.

On a monthly basis, merchandise exports rose by 3.3% from April to May, supported by a 26.9% increase in non-oil exports. This rise was bolstered by a surge in re-exports, which reached SAR 10.2 billion, the highest level for this category since 2017.

The share of oil exports in total exports declined to 72.4% in May from 73% in the same month last year.

Moreover, the value of re-exported goods increased by 33.9% during the same period.