Saudi revises unemployment target: Key drivers behind the shift
Saudi Arabia has revised its unemployment target to 5 per cent amid continued improvements in job creation, workforce participation, and private sector employment, according to the final 2025 Article IV Consultation report released by the International Monetary Fund (IMF).
The Ministry of Human Resources and Social Development (HRSD) welcomed the report's findings, which underline the country's accelerating labor market transformation under the Vision 2030 reform program. One of the most notable achievements includes a drop in Saudi national unemployment to 7 per cent by Q4 2024, surpassing the original Vision 2030 target ahead of schedule,
Read-
The new 5 per cent target signals growing confidence in Saudi's economic outlook and reflects progress in inclusive employment strategies. The IMF report noted that female labor force participation has doubled over the past five years to reach 36 per cent, while both youth and female unemployment rates have halved in a four-year span.
Private sector job growth and higher wages
The labor market is not only becoming more inclusive but also increasingly dynamic. In 2024, private sector employment for Saudi nationals grew by an average of 12 per cent, with momentum continuing into 2025. Wage premiums are rising, especially in higher-skilled sectors, signaling increased returns on education and workforce development initiatives.
An HRSD spokesperson commented: 'This report confirms that our Labor Market Strategy is delivering results at scale. Unemployment is falling, private sector opportunities are growing, and female participation in the workforce has reached historic highs. The structural transformation underway is real and it is delivering tangible benefits to citizens across the Kingdom.'
The IMF also praised legislative changes, including the February 2025 amendments to Saudi labor law, and highlighted government investments in workforce training, flexible employment models, and affordable childcare as critical enablers of long-term productivity and labor market inclusivity.
IMF commends broader economic resilience
The Ministry of Finance also welcomed the IMF's 2025 Article IV Consultation report, which underscores Saudi Arabia's growing economic resilience in the face of global volatility. The IMF noted the country's success in mitigating external shocks through strong domestic demand, low inflation, and a robust non-oil sector.
Non-oil growth and Vision 2030 momentum
Non-oil economic activity continues to be a central pillar of Saudi Arabia's economic expansion. In 2024, real non-oil GDP grew by 4.5 per cent, while non-oil private investment increased by 6.3 per cent year-on-year. The IMF projects real non-oil GDP growth of 3.4 per cent in 2025, driven by ongoing Vision 2030 projects, consumer demand, and strong credit growth.
The IMF report praised Saudi Arabia's commitment to fiscal sustainability, including scenario planning to address potential economic shocks. It called the country's prioritisation of high-impact projects a prudent approach to maintaining long-term economic stability.
As Vision 2030 moves closer to its critical phase, Saudi Arabia's structural reforms appear to be gaining traction across key areas of employment, investment, and fiscal management. Both the HRSD and the Ministry of Finance view the IMF's endorsement as validation of the Saudi's ongoing transformation.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The National
an hour ago
- The National
How 2,800 shekels become 1,350: Gazans pay high price to turn bank deposits into hard cash
In the shadow of war, economic collapse and severe shortages of food and other essentials, civilians in Gaza face an additional challenge in the struggle to survive: the rocketing cost of accessing their own money. With banks closed because of the conflict and digital payments widely rejected in local markets, Palestinians are forced to rely on an informal and increasingly predatory trade in physical currency, with commission rates as high as 55 per cent. 'I get paid 2,800 shekels [$817] a month from the Palestinian Authority,' said Kamel Abu Hazaa, 42, who was displaced from Jabalia and now lives in Al Nasr area of Gaza city. 'But after cashing it out, I receive only about 1,350 shekels. The rest? Gone, to liquidity traders and middlemen. "Even if I had the full amount, it wouldn't be enough. Flour costs 30 shekels a kilo, sugar is 200. The prices are insane." Businessmen, flush with cash earned before the war began in October 2023, now control the flow of physical currency. Given the risk of storing large amounts of money while banks are closed, they offload portions of it through a chain of intermediaries, who in turn sell it at a high mark-up to desperate civilians. Buyers receive cash after transferring funds to the traders electronically. But those who profit from the system do not consider themselves to be the villains. A small-scale cash trader operating in Gaza city said the system was deeply flawed, but insisted the responsibility lay with "big traders" who control the supply and set the rates. "We add maybe six to 10 per cent just to survive. But the ones above us? They want 45 per cent, sometimes more," he told The National. 'Today, I bought cash at a 43 per cent commission and had to sell it at 52 per cent just to make a living. We small traders don't even know who the big players are – the cash reaches us through intermediaries.' Moamen Al Gharbawi, 35, said his brothers living abroad send the family $700 a month. But he has been unable to convert that into cash because of the prices charged by currency traders. 'Last month, the commission was 38 per cent. This week, it's gone up to 55 per cent,' said Mr Al Gharbawi, who lives in the Sheikh Radwan area of Gaza city, after being displaced from Jabalia Camp. "More than half of what they send is lost and we're a family of eight. We don't have food. My elderly parents need special, healthy food that I can't afford "Liquidity traders are bleeding us dry. There's no one watching them, no one stopping them." Abdullah Sharshara, a legal researcher and civil society activist in Gaza, said the practice was unethical and illegal. 'Some say there's no legal basis to stop it,' he told The National. 'That's nonsense. The most basic legal foundation is that those trading liquidity are clearly violating the terms of the bank account agreement. It's a breach of Palestinian law and a flagrant exploitation of a broken system.' Mr Sharshara called for the Palestinian Monetary Authority to take immediate action, including freezing the accounts of those involved in the trade and reopening the banking system, ensuring it is organised and secure. "Major traders must be forced to inject liquidity back into the market through legitimate channels," he added. "Without oversight, the black market cash trade will only deepen people's suffering." While the trade in currency arose from the breakdown of formal banking, Gazans and experts agree that it has become a tool of exploitation in the hands of opportunists. 'People are desperate,' Mr Abu Hazaa said. 'They'll accept any rate just to put food on the table. But every day traders raise the percentage, and no one holds them accountable.'
Zawya
2 hours ago
- Zawya
SRC signs portfolio acquisition deal with Arab National Bank
Saudi Real Estate Refinance Company (SRC), a PIF company, has signed a new agreement with Arab National Bank to acquire a real estate finance portfolio. The agreement was signed in the presence of Majid bin Abdullah Al-Hogail, Minister of Municipalities and Housing and Chairman of the Board of the Saudi Real Estate Refinance Company, and Eng Salah Rashid Al-Rashed, Chairman of the Board of Arab National Bank. The agreement marks an extension of the strategic partnership between the two parties and reaffirms their shared commitment to supporting the growth and sustainability of the real estate finance market in the kingdom, said a statement. It aims to enhance liquidity for lenders and enables home ownership among citizens through advanced financing solutions that align with the objectives of the Housing Program under Saudi Vision 2030, contributing to the target of achieving 70% home ownership. Majeed Fahd Al-Abduljabbar, CEO of the Saudi Real Estate Refinance Company, said the agreement reflects the shared vision with Arab National Bank to enable home ownership among citizens by establishing a more efficient and sustainable secondary real estate finance market. It aligns with the ambitions of the coming phase and enhances the sector's appeal to both local and international investors. Obaid bin Abdullah Al-Rasheed, CEO of Arab National Bank, stated that the partnership with the Saudi Real Estate Refinance Company is a strategic step within the bank's ongoing efforts to provide innovative financing solutions that drive market growth and sustainability. He expressed confidence that this collaboration will contribute to establishing a strong and effective real estate market built on efficiency and trust. The agreement comes as part of a series of initiatives led by the Ministry of Municipalities and Housing to enhance citizen empowerment and build an integrated, stable financing environment that advances the Kingdom toward achieving both housing and economic objectives. SRC was established by the Public Investment Fund (PIF) in 2017 to develop Saudi Arabia's real estate finance market. It operates under a licence from the Saudi Central Bank (SAMA) to facilitate real estate refinancing. SRC plays a key role in achieving the objectives of the Housing Program under Saudi Vision 2030, which aims to increase homeownership rates among Saudi citizens. The company supports this goal by providing liquidity to lenders, enabling them to offer affordable real estate finance to individuals. Additionally, SRC works closely with partners to strengthen Saudi Arabia's housing ecosystem, said the statement. Copyright 2025 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (
Zawya
2 hours ago
- Zawya
OPEC oil output rises in July led by UAE and Saudi, survey finds
OPEC's oil output rose further in July after an OPEC+ agreement to raise production, a Reuters survey found on Friday, although the hike was limited by Iraq making additional cuts and by drone attacks on Kurdish oilfields. The Organization of the Petroleum Exporting Countries pumped 27.38 million barrels per day last month, up 270,000 bpd from June's revised total, the survey showed, with the United Arab Emirates and Saudi Arabia making the largest increases. OPEC+, which comprises OPEC and its allies including Russia, is accelerating its plan to unwind its most recent layer of output cuts. At the same time, some members are required to make extra cuts to compensate for earlier overproduction, in theory limiting the impact of the hikes. Under an agreement by eight OPEC+ members covering July output, the five of them that are OPEC members - Algeria, Iraq, Kuwait, Saudi Arabia and the UAE - were to raise output by 310,000 bpd before the effect of compensation cuts totalling 175,000 bpd for Iraq, Kuwait and the UAE. According to the survey, the actual increase by the five was 150,000 bpd. Saudi supply for June was revised up by 50,000 bpd after the country reported in OPEC's July monthly report that it supplied 9.36 million bpd in June. Iraq, which is under pressure to boost compliance with OPEC+ quotas, lowered output because of compensation cuts and due to drone attacks on oilfields in Iraqi Kurdistan. The UAE raised output by about 100,000 bpd, but still pumped below its OPEC+ quota. There is a wide range of estimates of output in Iraq and the UAE with many outside sources putting the countries' output higher than the countries themselves. While the Reuters survey and data provided by OPEC's secondary sources show they are pumping close to the quotas, other estimates, such as those of the International Energy Agency, say they are pumping significantly more. The Reuters survey aims to track supply to the market and is based on flows data from financial group LSEG, information from other companies that track flows such as Kpler, and information provided by sources at oil companies, OPEC and consultants. (Additional reporting by Ahmad Ghaddar. Editing by Mark Potter)
