Unemployment Among Saudis Drops as Foreign Investment Flows into Saudi Arabia
Saudi Arabia's unemployment rate among its citizens has shown a promising decline, falling to 7.1% in the second quarter of 2024 from 7.6% in the previous quarter and 8.5% a year ago, according to the General Authority for Statistics. This positive trend comes amidst the Kingdom's broader efforts to diversify its economy through the Vision 2030 initiative, which aims to reduce dependence on oil and stimulate job creation, especially in the private sector.
The overall unemployment rate, which includes both Saudis and non-Saudis, decreased to 3.3%, down from 4.1% in the same period last year. Notably, over 60% of the Saudi population is under 30 years old, making job creation a critical focus for the government. Recent data shows that 95.5% of unemployed Saudis are open to private sector job offers, indicating a shift in workforce dynamics.
The participation of women in the labor market has also seen significant improvement, with the unemployment rate among Saudi women dropping to 12.8% from 14.2% in the previous quarter. The female labor force participation rate has exceeded the 30% target set for 2030, reaching 35.4% in Q2 2024. However, the overall labor force participation rate for Saudi citizens remains just above 50%, at 50.8%, similar to the previous year.
Despite these advancements, the International Monetary Fund (IMF) has highlighted the need for further reforms to increase labor force participation and address wage disparities in the Kingdom.
Foreign Investment Trends Amid Economic Reforms
In conjunction with improvements in unemployment rates, Saudi Arabia continues to attract foreign investment, although the flow has seen a slight decline. The General Authority for Statistics reported that net foreign direct investment (FDI) inflows reached 11.7 billion riyals ($3.12 billion) in the second quarter of 2024, representing a 7.5% decrease year-on-year. This follows a first quarter inflow of 9.47 billion riyals ($2.5 billion).
The Kingdom is striving to attract $100 billion in foreign investments by 2030 as part of its comprehensive strategy to bolster growth in non-oil sectors and expand the private sector's role in the economy. Earlier this year, the Ministry of Investment announced plans to update investment laws to enhance transparency and ensure fair treatment for both local and foreign investors. Despite these government initiatives, foreign direct investment levels remain below the ambitious targets set by the Kingdom.
