Saudi unemployment down to pre-pandemic levels in Q1 as economy rebounds

Unemployment among Saudi citizens dropped to 11.7% in the first quarter of this year from 12.6% at the end of 2020, official data showed on Wednesday, as the economy of the world's biggest oil exporter picked up after a sharp contraction last year.

Saudi Arabia has been pushing through economic reforms since 2016 to create millions of jobs and aims to reduce unemployment to 7% by 2030, but those plans were disrupted by the coronavirus crisis that sent oil prices plummeting.

Unemployment hit a record high of 15.4% in the second quarter last year.

"In the first quarter of 2021, the overall Saudi unemployment rate decreased to 11.7% compared to 12.6% in the last quarter of 2020, reaching a level below pre-pandemic," the General Authority for Statistics said on Wednesday.

The Saudi economy is expected to grow 2.1% this year after shrinking by 4.1% in 2020, the International Monetary Fund has said.

In the first quarter, real gross domestic product shrank 0.5% quarter-on-quarter mainly because of a drop in the oil sector, reflecting the kingdom's voluntary oil output cuts.

The non-oil economy grew by 4.9% compared with the last three months of last year, driven by a 6.3% private sector expansion.

Recent data suggest economic activity picked up further in the second quarter, London-based Capital Economic said this week, estimating a 3.5% quarter-on-quarter growth in Q2.

"Saudi Arabia's economic recovery seems to have got back on track in Q2 and, as virus restrictions are eased further and oil production cuts are scaled back, a strong second half of the year lies in store," it said.