Saudi Arabia's unemployment falls to 2.8%: Here's what's changing in the job market
TL;DR:
Saudi Arabia's overall unemployment rate including nationals and expatriates dropped to just 2.8% in Q1 2025, down from 3.5% in Q4 2024.
Saudi nationals' unemployment reached a historic low of 6.3%, ahead of the
Vision 2030
target of 7%, prompting a revised aim of 5% by 2030.
Saudi women's unemployment fell to 10.5%, while female participation rose to 36.3%. Male unemployment declined to 4.0%, and male participation reached 66.4%.
The labour force participation rate overall rose to 68.2%, with Saudi citizen participation hitting 51.3%.
In a significant milestone for the Kingdom's economic transformation, Saudi Arabia's total unemployment rate dropped to 2.8% in the first quarter of 2025, the lowest on record, as confirmed by the General Authority for Statistics (GASTAT).
The decline reflects rising participation rates and successful workforce policies under Vision 2030. For Saudi nationals, the unemployment rate hit a historic low of 6.3%, surpassing earlier targets and prompting a new ambition to reduce it further to 5% by 2030.
Breaking Down the Figures
Overall Unemployment and Participation Rates
GASTAT reported an overall labour force participation rate of 68.2%, rising from 66.4% in Q4 2024.
Among Saudi nationals, the participation rate increased to 51.3%, signalling broader workforce integration.
Gendered Insights as per GASTAT
Saudi women's unemployment dropped sharply to 10.5%, down 3.6 percentage points year-on-year, driven by structural reforms and increased access to public and private job sectors. Female participation rose to 36.3%, with an employment-to-population ratio of 32.5%.
For Saudi men, unemployment decreased to 4.0%, while their labour force participation reached 66.4%.
Youth & Age Cohorts
Employment among core working-age Saudis (aged 25–54) increased to 65.9%, with unemployment falling to 5.4%. Young Saudi men (15–24 years) saw their unemployment drop to 11.6%, despite a slight decline in participation to 33.0%. Young Saudi women improved their employment-to-population ratio to 14.6%, with participation rising to 18.4%.
What Is Driving the Decline?
Several factors are credited for this improvement:
Vision 2030 Economic Reforms:
The government has invested heavily in infrastructure, technology, tourism (e.g., NEOM and Red Sea Project), and financial services, generating thousands of new jobs.
National Labour Programs:
Programs like 'Nitaqat' and the Human Capability Development Program are tailored to skill and match Saudi job seekers with private sector roles.
Rise in Female Employment:
Post-2018 reforms that removed mobility and guardianship restrictions have led to more Saudi women entering the workforce. The latest GASTAT data shows women's unemployment falling by 1.2% compared to the previous quarter.
Private Sector Incentives:
Companies hiring Saudi nationals benefit from subsidies, relaxed taxes, and accelerated licensing processes. This has encouraged more private firms to localise employment.
Labour Market Challenges Remain
Despite progress, challenges persist:
Youth unemployment, while improving, still hovers near 15%.
Many Saudis continue to prefer public sector jobs due to higher pay and security.
Private sector alignment with graduate skills remains inconsistent.
The Ministry of Human Resources and Social Development (MHRSD) recently announced plans to expand vocational training partnerships and promote hybrid work opportunities for Saudi women to address gaps in rural employment zones.
Why It Matters:
Saudi Arabia's progress on unemployment is more than just a statistical improvement, it represents a cultural and structural transformation. By 2030, the Kingdom aims to have 70% private sector workforce participation by Saudi nationals. Achieving this will determine the sustainability of its diversification agenda and reduce the pressure on public sector employment.
The drop in the unemployment rate boosts investor confidence, aligns with international development benchmarks, and provides the groundwork for a more inclusive and competitive labour market.
As of July 2025, Saudi Arabia's steady drop in unemployment reflects a proactive approach to restructuring its economy and empowering its workforce. Continued investments in skill-building, gender inclusion, and private sector incentives are expected to maintain this momentum. However, maintaining long-term success will depend on narrowing regional inequalities, better aligning education with industry needs, and ensuring the reforms reach all segments of Saudi society.
FAQs:
Q1: What is Saudi Arabia's unemployment rate as of 2025?
As of Q1 2025, the overall unemployment rate is 2.8%, according to GASTAT.
Q2: What programs are helping reduce unemployment?
Key programs include Saudisation (Nitaqat), the Human Capability Development Program, and support for private sector hiring.
Q3: Is female employment rising in Saudi Arabia?
Yes. Female participation is now at 36.3%, with women's unemployment declining due to targeted government initiatives.
Q4: What sectors are generating the most jobs?
Technology, tourism, logistics, and finance have been the fastest-growing employment sectors.
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Key programs include Saudisation (Nitaqat), the Human Capability Development Program, and support for private sector hiring. Q3: Is female employment rising in Saudi Arabia? Yes. Female participation is now at 36.3%, with women's unemployment declining due to targeted government initiatives. Q4: What sectors are generating the most jobs? Technology, tourism, logistics, and finance have been the fastest-growing employment sectors.
