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)
TT

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.



Firm Dollar Keeps Pound, Euro and Yen Under Pressure

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
TT

Firm Dollar Keeps Pound, Euro and Yen Under Pressure

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo

The US dollar charged ahead on Thursday, underpinned by rising Treasury yields, putting the yen, sterling and euro under pressure near multi-month lows amid the shifting threat of tariffs.

The focus for markets in 2025 has been on US President-elect Donald Trump's agenda as he steps back into the White House on Jan. 20, with analysts expecting his policies to both bolster growth and add to price pressures, according to Reuters.

CNN on Wednesday reported that Trump is considering declaring a national economic emergency to provide legal justification for a series of universal tariffs on allies and adversaries. On Monday, the Washington Post said Trump was looking at more nuanced tariffs, which he later denied.

Concerns that policies introduced by the Trump administration could reignite inflation has led bond yields higher, with the yield on the benchmark 10-year US Treasury note hitting 4.73% on Wednesday, its highest since April 25. It was at 4.6709% on Thursday.

"Trump's shifting narrative on tariffs has undoubtedly had an effect on USD. It seems this capriciousness is something markets will have to adapt to over the coming four years," said Kieran Williams, head of Asia FX at InTouch Capital Markets.

The bond market selloff has left the dollar standing tall and casting a shadow on the currency market.

Among the most affected was the pound, which was headed for its biggest three-day drop in nearly two years.

Sterling slid to $1.2239 on Thursday, its weakest since November 2023, even as British government bond yields hit multi-year highs.

Ordinarily, higher gilt yields would support the pound, but not in this case.

The sell-off in UK government bond markets resumed on Thursday, with 10-year and 30-year gilt yields jumping again in early trading, as confidence in Britain's fiscal outlook deteriorates.

"Such a simultaneous sell-off in currency and bonds is rather unusual for a G10 country," said Michael Pfister, FX analyst at Commerzbank.

"It seems to be the culmination of a development that began several months ago. The new Labour government's approval ratings are at record lows just a few months after the election, and business and consumer sentiment is severely depressed."

Sterling was last down about 0.69% at $1.2282.

The euro also eased, albeit less than the pound, to $1.0302, lurking close to the two-year low it hit last week as investors remain worried the single currency may fall to the key $1 mark this year due to tariff uncertainties.

The yen hovered near the key 160 per dollar mark that led to Tokyo intervening in the market last July, after it touched a near six-month low of 158.55 on Wednesday.

Though it strengthened a bit on the day and was last at 158.15 per dollar. That all left the dollar index, which measures the US currency against six other units, up 0.15% and at 109.18, just shy of the two-year high it touched last week.

Also in the mix were the Federal Reserve minutes of its December meeting, released on Wednesday, which showed the central bank flagged new inflation concerns and officials saw a rising risk the incoming administration's plans may slow economic growth and raise unemployment.

With US markets closed on Thursday, the spotlight will be on Friday's payrolls report as investors parse through data to gauge when the Fed will next cut rates.