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Saudi Arabia’s Unemployment Drops to Under 12%

Saudi unemployment rate drops in the last government survey for Q1 2020, Asharq Al-Awsat
Saudi unemployment rate drops in the last government survey for Q1 2020, Asharq Al-Awsat
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Saudi Arabia’s Unemployment Drops to Under 12%

Saudi unemployment rate drops in the last government survey for Q1 2020, Asharq Al-Awsat
Saudi unemployment rate drops in the last government survey for Q1 2020, Asharq Al-Awsat

The unemployment rate in Saudi Arabia fell marginally in the first quarter of the current fiscal year when compared to the fourth quarter of 2019, a General Authority for Statistics (GaStat) report has said.

It confirmed, however, that the data do not reflect the ramifications of the coronavirus pandemic.

It said the unemployment rate decreased from 12.0% to 11.8% during the mentioned period. At the same time, unemployment rate among females reached 28.2%, a drop of 2.6 percentage points.

The unemployment rate for men (aged 15 years and above) reached 5.6%, with an increase of 0.7 percentage points, the report said.

The labor force participation rate for the total population (aged 15 years and above) increased by 1.8 percentage points compared to Q1 of 2019, reaching 58.2%.

Labor force participation for men was 80.4%, while the rate of participation of women in the Labor force was 25.4%, data showed, according to the Saudi Press Agency (SPA).

The released data do not reflect the impact of the COVID-19 crisis as they were collected early in the first quarter. The total unemployment rate stood at 5.7% in Q1 this year.

Based on the administrative data, Saudi and non-Saudi employees amounted to 13.63 million individuals. The total number of Saudi employees (males and females) reached 3.2 million individuals, 2.06 million Saudi men and 1.13 Saudi females, the report said.

The participation rate in the labor force for Saudis (aged 15 years and above) fell by 0.5 percentage points to 46.2% compared to Q1 2020. The Saudi male participation rate in the labor force fell by 0.8 percentage points from the previous quarter, reaching 65.8%, while the Saudi female participation rate fell by 0.1 percentage points from the previous quarter, reaching 25.9%.

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Bank of Israel Keeps Rates on Hold as Inflation Stays Just Above Target Range

The Bank of Israel building in Jerusalem - Reuters
The Bank of Israel building in Jerusalem - Reuters
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Bank of Israel Keeps Rates on Hold as Inflation Stays Just Above Target Range

The Bank of Israel building in Jerusalem - Reuters
The Bank of Israel building in Jerusalem - Reuters

The Bank of Israel left short-term interest rates unchanged on Monday citing "geopolitical uncertainty" and saying inflation remained above the target range despite it easing in May.

The central bank left its benchmark rate at 4.50% for the 12th meeting in a row.

"In view of the geopolitical uncertainty, the interest rate path will be determined in accordance with the convergence of inflation to its target range, stability in the financial markets, economic activity, and fiscal policy," the bank said in a statement announcing the decision, Reuters reported.

Its last move was to reduce the rate by 25 basis points in January 2024 after inflation eased and economic growth slowed in the early days of the Gaza war. It has kept policy steady since then and said it is in no rush to ease again while inflation remains above target.

Ten of 11 analysts polled by Reuters had expected no rate move on Monday. One predicted a 25 bps rate cut due to the end of a 12 day Israel-Iran war that saw Israel's risk premium slide and the shekel appreciate sharply.

The annual inflation rate eased to 3.1% in May from 3.6% in April but remained above the government's 1-3% annual target.

The bank said that it forecast inflation would ease to within its target range in coming months and be around the midpoint of that range in a year's time.

However, it noted that risks remained that could affect the inflation outlook.

"In the Committee’s assessment, there are several risks for a possible acceleration of inflation or for it not converging to the target range: geopolitical developments and their impact on economic activity, an increase in demand alongside supply constraints, and worsening global terms of trade," the bank said.

The economy grew by an annualised 3.7% in the first quarter after a 1% expansion for all of 2024 due to the war.

Economic uncertainty has lingered due to the 21-month-old conflict between Israel and Palestinian group Hamas in Gaza.

Israeli Prime Minister Benjamin Netanyahu is due to meet with US President Donald Trump at the White House on Monday, while Israeli officials hold indirect talks with Hamas, aimed at a US-brokered Gaza hostage-release and ceasefire deal.