Saudi Arabia Experiences Historic Low Unemployment Rate of 6.3% in Q1 2025
In a significant milestone for the Kingdom of Saudi Arabia, the national unemployment rate among its citizens has reached a record low of 6.3% in Q1 2025, surpassing the original Vision 2030 target of reducing unemployment to 7% by 2030. This achievement was first met ahead of schedule in 2024.
This historic low unemployment rate is primarily attributed to increased female labor force participation and sustained labor reforms. Female unemployment has dropped to a record low of 10.5%, down by 3.6 percentage points year-on-year, and female labor participation has edged up to 36.3%. The employment-to-population ratio for women has also risen to 32.5%.
Simultaneously, continued positive trends for male unemployment have contributed to the overall decline. The unemployment rate for men has fallen slightly to 4.0%.
Broader labor market reforms and socio-economic policies driven by Vision 2030 have supported job creation and inclusion, enhancing overall labor participation to 68.2% for Saudis and non-Saudis combined.
The achievement of a 6.3% unemployment rate ahead of schedule demonstrates the successful implementation of Vision 2030’s labor market reforms focused on increasing Saudi workforce participation and reducing unemployment. In response to this early achievement, the government has revised its unemployment target downward to an even more ambitious 5% by 2030.
The International Monetary Fund (IMF) has formally commended Saudi Arabia for these reforms, emphasizing their critical role in sustaining economic growth and social development. The IMF's recent Article 4 concluding statement commends Saudi Arabia's labor market reforms.
The revised target of 5% unemployment by 2030 will be pursued through continuing efforts to increase workforce participation, especially among women, and further economic diversification. Vision 2030’s broader framework supports ongoing job creation through innovation, private sector growth, and enhanced education and training programs aligned with labor market needs.
With 93% of Vision 2030 key performance indicators nearing completion, the labor market’s strong performance is part of a wider trend of economic and social transformation in Saudi Arabia. However, challenges remain, such as aligning skills with market demand and ensuring sustained job creation.
In summary, the historic low unemployment rate among Saudi nationals in Q1 2025 is driven chiefly by increased female labor participation and sustained labor reforms, exceeding initial Vision 2030 goals and prompting even more ambitious future targets that will continue to underpin Saudi Arabia’s economic development and social progress. The latest data indicates a labor market in transition within Saudi Arabia, becoming increasingly inclusive and adaptive to the needs of a modernizing economy.
- Amidst the economic growth and development, the news of a revised unemployment target for Saudi Arabia by 2030, down to an even more ambitious 5%, indicates the success of their labor market reforms in both entertainment and finance sectors, as they continue to rely on increased workforce participation, especially among women, and further economic diversification to achieve this goal.
- In line with the broader framework of Vision 2030, the entertainment and finance industries are expected to see a positive impact due to the enhanced job creation, driven by continued efforts to innovate and develop the private sector, as well as improved education and training programs tailored to meet labor market demands.
