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Saudi Arabia has adjusted its unemployment target to 5 percent, driven by ongoing enhancements in job creation, workforce participation, and private sector employment, according to the final 2025 Article IV Consultation report issued by the International Monetary Fund (IMF).
The Ministry of Human Resources and Social Development (HRSD) expressed its approval of the report’s findings, which highlight the nation’s evolving labor market as part of the Vision 2030 reform initiative. A significant accomplishment is the expected reduction in unemployment among Saudi nationals to 7 percent by the fourth quarter of 2024, achieving this milestone ahead of the original Vision 2030 schedule, as reported by Saudi Gazette.
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The updated unemployment target reflects an increasing faith in Saudi Arabia’s economic prospects and showcases advancements in inclusive employment approaches. The IMF notes that female participation in the labor force has doubled over the past five years to 36 percent, and youth and female unemployment rates have both decreased by half over a four-year period.
Growth in the private sector and rising wages
The labor market is becoming more inclusive and dynamic. In 2024, employment in the private sector for Saudi citizens rose by an average of 12 percent, with this trend expected to persist into 2025. Wage increases, particularly in skilled sectors, indicate a growing return on investments in education and workforce development.
A spokesperson from HRSD stated, “This report validates that our Labor Market Strategy is producing significant results. Unemployment rates are declining, private sector job creation is on the rise, and female workforce participation has reached unprecedented levels. The ongoing structural changes are substantial and are yielding real benefits for citizens throughout the Kingdom.”
The IMF also acknowledged recent legislative changes, such as the amendments to Saudi labor law in February 2025, and pointed out government initiatives for workforce training, adaptable employment models, and affordable childcare as vital components for enhancing long-term productivity and labor market inclusivity.
IMF praises overall economic robustness
The Ministry of Finance welcomed the findings of the IMF’s 2025 Article IV Consultation report, highlighting Saudi Arabia’s increasing economic resilience amidst global uncertainties. The IMF recognized the nation’s ability to manage external shocks through solid domestic demand, low inflation, and a thriving non-oil sector.
According to a report by the Saudi Press Agency, the IMF particularly赞扬ed Saudi Arabia’s fiscal transparency and risk management strategies, praising the shift towards medium-term financial planning and the proactive establishment of spending limits extending to 2030. The report emphasized that while global trade tensions have a limited direct impact, easing OPEC+ production cuts will further bolster economic stability.
Non-oil sector growth and the ongoing momentum of Vision 2030
Economic activities outside the oil sector remain crucial to Saudi Arabia’s economic growth. In 2024, real non-oil GDP expanded by 4.5 percent, while non-oil private investments rose by 6.3 percent year-on-year. The IMF forecasts a real GDP growth of 3.4 percent for the non-oil sector in 2025, fueled by continuous Vision 2030 initiatives, consumer demand, and robust credit growth.
The IMF report commended Saudi Arabia’s commitment to fiscal sustainability, highlighting its scenario planning to address potential economic disturbances. The prioritization of high-impact projects was described as a prudent strategy to ensure sustained economic stability.
As Vision 2030 approaches a pivotal phase, the structural reforms in Saudi Arabia seem to be gaining momentum in critical areas such as employment, investment, and fiscal management. Both the HRSD and the Ministry of Finance regard the IMF’s endorsement as a confirmation of the nation’s ongoing transformation.