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Saudi Unemployment Hits Record Low, Approaches ‘Vision 2030’ Target

Unemployment rate hits historic low in Saudi Arabia, bolstered by women entering the job market (Asharq Al-Awsat)
Unemployment rate hits historic low in Saudi Arabia, bolstered by women entering the job market (Asharq Al-Awsat)
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Saudi Unemployment Hits Record Low, Approaches ‘Vision 2030’ Target

Unemployment rate hits historic low in Saudi Arabia, bolstered by women entering the job market (Asharq Al-Awsat)
Unemployment rate hits historic low in Saudi Arabia, bolstered by women entering the job market (Asharq Al-Awsat)

In the last quarter of 2022, the unemployment rates in Saudi Arabia hit a historical low of 8%, which is only one percentage point away from the targeted rate of 7% specified in the country's national transformation plan, “Vision 2030.”

The decrease in joblessness in the Kingdom can be attributed to the government’s activities and the private sector’s role in employment operations.

Legislation and localization programs in the country have also played a crucial role.

According to experts, government procedures and regulations related to human resources, whether in the public or private sector, have efficiently worked to create jobs and contribute to reducing the unemployment rate.

Saleh Al-Sedmi, a human resources expert, confirmed that giant projects, foreign companies entering the Saudi market, and accelerated employment in both the public and private sectors have directly contributed to the decrease in unemployment rates in the Kingdom.

Speaking to Asharq Al-Awsat, he added that Saudization programs targeting active and promising sectors and employing citizens have also helped increase the number of employed individuals in the local market.

Moreover, some foreign companies relocating their regional headquarters to the Saudi capital, Riyadh, have reinforced efforts to reduce non-employment.

The country's overall unemployment rate, including non-citizens, fell to 4.8% in the final three months of 2022, according to a statement by the General Authority for Statistics (Gastat).

Gastat also revealed that unemployment in Saudi Arabia among citizens decreased to 8% in the fourth quarter of 2022, down from 9.9% the previous quarter.

Workforce participation among female citizens is also on the rise, with unemployment among Saudi women dropping to 15.4% in the final three months of 2022 from 20.5% in the previous quarter.

Despite the economic hardships experienced by many countries worldwide, including G20 states, due to market-based challenges and geopolitical factors, the unemployment rate in Saudi Arabia exceeded expectations, according to Gastat.

The decrease in unemployment levels in the Kingdom is the result of legislation, Saudization programs, job support, and monitoring of facilities by all relevant government entities.

Plans and initiatives launched under Vision 2030 have also contributed to achieving the highest rate of labor force participation, as per Gastat.

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Trump Goes to War with the Fed

US Federal Reserve Chair Jerome Powell, seen in April 2025, said he considered Fed independence to be a matter of law. Brendan SMIALOWSKI / AFP
US Federal Reserve Chair Jerome Powell, seen in April 2025, said he considered Fed independence to be a matter of law. Brendan SMIALOWSKI / AFP
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Trump Goes to War with the Fed

US Federal Reserve Chair Jerome Powell, seen in April 2025, said he considered Fed independence to be a matter of law. Brendan SMIALOWSKI / AFP
US Federal Reserve Chair Jerome Powell, seen in April 2025, said he considered Fed independence to be a matter of law. Brendan SMIALOWSKI / AFP

Donald Trump's simmering discontent with the US Federal Reserve boiled over this week, with the president threatening to take the unprecedented step of ousting the head of the fiercely independent central bank.

Trump has repeatedly said he wants rate cuts now to help stimulate economic growth as he rolls out his tariff plans, and has threatened to fire Fed Chair Jerome Powell if he does not comply, putting the bank and the White House on a collision course that analysts warn could destabilize US financial markets.

"If I want him out, he'll be out of there real fast, believe me," Trump said Thursday, referring to Powell, whose second four-year stint as Fed chair ends in May 2026.
Powell has said he has no plans to step down early, adding this week that he considers the bank's independence over monetary policy to be a "matter of law."

"Clearly, the fact that the Fed chairman feels that he has to address it means that they are serious," KPMG chief economist Diane Swonk told AFP, referring to the White House.

Stephanie Roth, chief economist at Wolfe Research, said she thinks "they will come into conflict," but does not think "that the Fed is going to succumb to the political pressure."

Most economists agree that the administration's tariff plans -- which include a 10 percent "baseline" rate on imports from most countries -- will put upward pressure on prices and cool economic growth, at least in the short term.

That would keep inflation well away from the Fed's long-term target of two percent, and likely prevent policymakers from cutting rates in the next few months.

"They're not going to react because Trump posted that they should be cutting," Roth said in an interview, adding that doing so would be "a recipe for a disaster" for the US economy.

- Fed independence 'absolutely critical' -
Many legal scholars say the US president does not have the power to fire the Fed chair or any of his colleagues on the bank's 19-person rate-setting committee for any reason but cause.

The Fed system, created more than a century ago, is also designed to insulate the US central bank from political interference.

"Independence is absolutely critical for the Fed," said Roth. "Countries that do not have independent central banks have currencies that are notably weaker and interest rates that are notably higher."

Moody's Analytics chief economist Mark Zandi told AFP that "we've had strong evidence that impairing central bank independence is a really bad idea."

- 'Can't control the bond market' -
One serious threat to the Fed's independence comes from an ongoing case in which the Trump administration has indicated it will seek to challenge a 1935 Supreme Court decision denying the US president the right to fire the heads of independent government agencies.

The case could have serious ramifications for the Fed, given its status as an independent agency whose leadership believes they cannot currently be fired by the president for any reason but cause.

But even if the Trump administration succeeds in court, it may soon run into the ultimate guardrail of Fed independence: The bond markets.

During the recent market turbulence unleashed by Trump's tariff plans, US government bond yields surged and the dollar fell, signaling that investors may not see the United States as the safe haven investment it once was.

Faced with the sharp rise in US Treasury yields, the Trump administration paused its plans for higher tariffs against dozens of countries, a move that helped calm the financial markets.

If investors believed the Fed's independence to tackle inflation was compromised, that would likely push up the yields on long-dated government bonds on the assumption that long-term inflation would be higher, and put pressure on the administration.

"You can't control the bond market. And that's the moral of the story," said Swonk.

"And that's why you want an independent Fed."