Saudi Arabia fastest growing economy in G20, unemployment at historic low: IMF

Saudi Arabia’s unemployment rate is at a historic low, according to an International Monetary Fund (IMF) report published on Wednesday.

The country was also the fastest-growing G20 economy in 2022, the report stated.

Unemployment rate

The total rate of unemployment in the Kingdom dropped to 4.8 percent by the end of 2022 from nine percent during COVID-19, reflecting an increase in Saudi workers in the private sector as well as expatriate workers – mainly in the construction and agricultural sectors – returning to above pre-COVID levels.

Saudi Arabia exports wheat, dates, dairy products, eggs, fish, poultry, fruits, vegetables and flowers to markets around the world. Dates, once a staple of the Saudi diet, are now mainly grown for global humanitarian aid.

Unemployment among the youth was also halved to 16.8 percent in 2022, while female participation in the labor force reached 36 percent, exceeding the 30 percent target set under the Saudi Vision 2030 reform agenda.

Economic growth

The Kingdom’s overall economic growth reached 8.7 percent, partly due to strong oil production and a 4.8 percent non-oil GDP “driven by robust private consumption and non-oil private investment,” the report stated.

The main sectors driving non-oil growth were wholesale, retail trade, construction and transport. The IMF report forecasts this non-oil growth momentum to continue rising in 2023.

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The inflation rate remained low and is expected to ease further. Despite a rise to 3.4 percent in early 2023, the inflation was back at 2.8 percent in May 2023, as contributions from the transport sector and food prices offset the increase in rent.

Structural reform progress

The IMF executive board noted significant progress in Saudi Arabia’s structural reform agenda, particularly the improvement in female labor force participation and improvements in the regulatory and business environment. They have contributed to higher private sector investment and encouraged “positive progress,” according to the report.

The country’s banking sector remains “strong,” the report stated.

It also highlighted Saudi Arabia’s Green Initiative (SGI), whose implementation will be critical to meet the net emissions reduction target.

SGI is a “unifying vision for climate action in Saudi, focused on combating climate change, improving quality of life and protecting the environment for future generations,” according to the Saudi government’s Vision 2030 website.

IMF report is compiled annually whereby a staff team visits the country, collects economic and financial information, and discusses with officials the subject country’s economic developments and policies.

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