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Saudi Arabia is expected to see a gradual improvement in its unemployment rate over the coming months as the kingdom opens up its economy and continues lifting restrictions related to the coronavirus pandemic, analysts have said.
However, the country may not be able to rely on annual dividends of almost $75 billion from state oil company Saudi Aramco to plug its budget deficit beyond next year unless crude prices increase, they added.
Jadwa Investment said jobs prospects are likely to improve in the Saudi market after the unemployment rate jumped to 15.4 percent in the second quarter of 2020, up from 11.8 percent in Q1, mainly due to the impact of the pandemic.
The General Authority for Statistics (GaStat) said the number of expats in the labour market declined by 19,000, on a net basis, in Q2, as lockdowns forced many out of work.
At the same time, GaStat data showed that the number of new private sector expat work visas issued in Q2 totalled 32,000, significantly lower than the 342,000 issued during Q1.
“Despite this, the data also shows that 97 percent of issued visas were unused, whilst the remaining 3 percent were cancelled. This comes as no surprise considering that pandemic induced travel restrictions were also imposed during the quarter,” Jadwa noted.
Jadwa added that on a sectorial basis, most sectors saw a decline in the number of both Saudi and expat workers in Q2, with the highest number of losses in the private sector seen in education, wholesale and retail and professional activities, similar to trends observed on an international level.