Saudi Arabia’s jobless rate drops to lowest level since 2016

Unemployment among Saudi Arabia’s citizens fell in the first quarter to its lowest level in nearly five years, signaling progress for the crown prince in his most pressing domestic challenge – creating enough jobs for a youthful population.

The jobless rate fell to 11.7 per cent, down from 12.6 per cent in the last three months of 2020, which itself represented a decline from a record at the height of the coronavirus pandemic. Male unemployment increased slightly to 7.2 per cent from 7.1 per cent in the fourth quarter of last year, while among women the rate fell to 21.2 per cent from 24.4 per cent, according to data from the General Authority for Statistics.

Job creation is a major consideration for Crown Prince Mohammed bin Salman as he reshapes an economy dependent on exporting oil and importing foreign labor. The global health emergency exacerbated the scale of the problem, pushing citizen unemployment up to 15.4 per cent during the kingdom’s coronavirus lockdown last year.

Officials have restricted a slew of professions to Saudis only and increased fees for businesses that hire foreign workers – part of a broader effort to replace employees from Asia, Africa and other parts of the Arab world with citizens. Prince Mohammed is also revamping regulations to try to boost entrepreneurship and attract more foreign investment, hoping both will eventually create more jobs for Saudis.

In a local television interview in April, he predicted the jobless rate would fall below 11 per cent this year, reflecting a “V-shaped recovery,” eventually reaching his goal of 7 per cent by 2030.

Some economists say that target is unrealistic as a demographic bulge of young people enters the labour market, necessitating the creation of at least 150,000 new jobs each year in order to keep unemployment steady.