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Saudi Arabia has revised its unemployment target to 5 per cent amid continued improvements in job creation, workforce participation, and private sector employment, according to the final 2025 Article IV Consultation report released by the International Monetary Fund (IMF).
The Ministry of Human Resources and Social Development (HRSD) welcomed the report’s findings, which underline the country’s accelerating labor market transformation under the Vision 2030 reform program. One of the most notable achievements includes a drop in Saudi national unemployment to 7 per cent by Q4 2024, surpassing the original Vision 2030 target ahead of schedule, a Saudi Gazette report conveyed.
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The new 5 per cent target signals growing confidence in Saudi’s economic outlook and reflects progress in inclusive employment strategies. The IMF report noted that female labor force participation has doubled over the past five years to reach 36 per cent, while both youth and female unemployment rates have halved in a four-year span.
Private sector job growth and higher wages
The labor market is not only becoming more inclusive but also increasingly dynamic. In 2024, private sector employment for Saudi nationals grew by an average of 12 per cent, with momentum continuing into 2025. Wage premiums are rising, especially in higher-skilled sectors, signaling increased returns on education and workforce development initiatives.
An HRSD spokesperson commented: “This report confirms that our Labor Market Strategy is delivering results at scale. Unemployment is falling, private sector opportunities are growing, and female participation in the workforce has reached historic highs. The structural transformation underway is real and it is delivering tangible benefits to citizens across the Kingdom.”
The IMF also praised legislative changes, including the February 2025 amendments to Saudi labor law, and highlighted government investments in workforce training, flexible employment models, and affordable childcare as critical enablers of long-term productivity and labor market inclusivity.
IMF commends broader economic resilience
The Ministry of Finance also welcomed the IMF’s 2025 Article IV Consultation report, which underscores Saudi Arabia’s growing economic resilience in the face of global volatility. The IMF noted the country’s success in mitigating external shocks through strong domestic demand, low inflation, and a robust non-oil sector.
A Saudi Press Agency report said, that the report particularly praised Saudi Arabia’s fiscal transparency and risk analysis efforts, commending the move toward medium-term financial planning and the proactive setting of spending ceilings through 2030. It emphasised that the direct impact of global trade tensions on Saudi Arabia remains limited and that easing OPEC+ production cuts will further support economic stability.
Non-oil growth and Vision 2030 momentum
Non-oil economic activity continues to be a central pillar of Saudi Arabia’s economic expansion. In 2024, real non-oil GDP grew by 4.5 per cent, while non-oil private investment increased by 6.3 per cent year-on-year. The IMF projects real non-oil GDP growth of 3.4 per cent in 2025, driven by ongoing Vision 2030 projects, consumer demand, and strong credit growth.
The IMF report praised Saudi Arabia’s commitment to fiscal sustainability, including scenario planning to address potential economic shocks. It called the country’s prioritisation of high-impact projects a prudent approach to maintaining long-term economic stability.
As Vision 2030 moves closer to its critical phase, Saudi Arabia’s structural reforms appear to be gaining traction across key areas of employment, investment, and fiscal management. Both the HRSD and the Ministry of Finance view the IMF’s endorsement as validation of the Saudi’s ongoing transformation.
