IMF: Unemployment rates in Saudi Arabia decline, women’s labor force participation rises

The International Monetary Fund (IMF) noted the reforms undertaken in the Saudi labor market, which are beginning to yield tangible results, including declining unemployment rates, increasing women’s labor force participation, and increased private sector employment.

The report was published on June 26, just days before the General Authority for Statistics confirmed the Kingdom’s rapid progress in labor market reform in its Labor Market Bulletin for the first quarter of 2025.

The preliminary results of the IMF’s annual consultations with the Kingdom highlight exceptional growth in the non-oil sector, the effectiveness of structural reforms, and sound fiscal policies. The Fund clearly expressed its support for the government’s decision to adopt expansionary fiscal policies in 2025 to maintain growth momentum despite lower oil prices. Regarding the labor market, the International Monetary Fund (IMF) describes the ongoing structural transformation of the Saudi labor market. The latest figures released by the General Authority for Statistics indicate that the unemployment rate among Saudi citizens continues to decline, now standing at 6.3%. This is a significant improvement compared to previous years and indicates that the Saudi economy is creating more opportunities for Saudi citizens.

The IMF praised the significant and noticeable increase in women’s participation in the labor market, which reached 36.3% in the first quarter of 2025, according to the General Authority for Statistics’ Q1 2025 Labor Market Bulletin, compared to only 19.7% in 2018. This represents one of the most significant social and economic transformations in the Kingdom’s modern history, reflecting the success of policies and the evolution of social norms. Meanwhile, the General Authority for Statistics reported that the unemployment rate among Saudi women fell to a record low of 10.5%, continuing a years-long upward trend in women’s participation in the labor market. Furthermore, the private sector now plays a greater role in job creation, with an increasing number of Saudi citizens finding sustainable employment opportunities outside the government sector. The International Monetary Fund noted that this shift is supported by ongoing reforms to enhance productivity, develop skills, and engage employers.

The IMF statement noted the rise in wages in high-skilled jobs, reflecting the growing demand for advanced competencies in fields such as engineering, digital services, and the financial sector. While this increase is a positive indicator of the activity and vitality of the labor market, the IMF emphasized the importance of continuing to develop and qualify national cadres in these sectors, which will contribute to enhancing competitiveness and stabilizing wage levels in the long term. Dr. Abdullah bin Nasser Abuthnain, Deputy Minister of Human Resources and Social Development for Labor, praised the results, saying: “The recent statement issued by the International Monetary Fund confirms the magnitude of the transformation taking place in the labor market in the Kingdom of Saudi Arabia and is evidence of the effectiveness of the labor market strategy in achieving tangible results.

He stated that the ongoing structural reforms contribute to providing more opportunities for citizens, especially women and youth, and enhance the role of the private sector as a major driver of sustainable job growth. The IMF’s praise of the changes taking place in the Kingdom’s labor market coincides with the release of the latest labor market bulletin from the General Authority for Statistics, which highlighted the progress being made in several important areas, such as employment in general, women’s participation in the labor market, and job creation in the private sector.

He said: “While we are proud of our achievements, our focus remains on enabling every Saudi citizen to obtain rewarding job opportunities within a modern, dynamic, and globally competitive economy. He noted that the IMF’s praise and the Saudi labor market data combined highlight The momentum of reforms and tangible progress on the ground.

In this context, the International Monetary Fund affirmed that the Kingdom’s adoption of a fiscal policy higher than the budget allocation for 2025 is “an appropriate measure to mitigate cyclical fluctuations that could exacerbate the economic impact of lower oil prices.”

This endorsement supports continued investment in human capital development, enhancing labor mobility, and advancing long-term economic diversification efforts, all of which are key pillars of achieving the goals of the Kingdom’s Vision 2030.

The Ministry of Human Resources and Social Development will continue implementing reforms aimed at expanding the base of opportunities available to Saudi citizens, attracting distinguished talents from around the world, and building an inclusive labor market characterized by high-quality and efficient performance.