| In a major achievement for the kingdom’s diversification strategy, the non-oil sector surged 3.3% in the first quarter of the year, compared to 1.6% during the same period in 2020.
While Saudi Arabia’s overall GDP contracted 3.3% on the back of declines in the oil GDP, the positive momentum witnessed in the non-oil sector bodes well for the future.
Government services also posted gains of 0.3% during the period, according to the General Authority for Statistics (GASTAT).
GASTAT’s labour report also suggests the kingdom has been spared economically from the COVID-19 pandemic. Data shows total unemployment rate fell to 7.4% in the fourth quarter of 2020, compared to 8.5% during the third quarter.
Labour force participation rate of the total population (Saudis and non-Saudis 15 years old and above) increased to 61% during the fourth quarter of 2020 compared to 59.5% in the third quarter of the same year.
Unemployment rate among male Saudis slipped to 7.1%, levels last seen in the first quarter of 2020, while Saudi female unemployment rate stood at 24.4%, its lowest level since at least 2016.
What is even more heartening is that the inflow of Saudi women into the labour force did not lead to more unemployment, but generated more economic activity.
Crucially, the increase in employment was not driven by the government hiring Saudi women, but the private sector, as the spate of new reforms empowering women led to an increase in women entering the workforce.
The bounce back in non-oil GDP, a vigorous vaccine rollout in the kingdom, and the strong labour market suggests the Saudi economy is expecting robust economic activity for the rest of the year.
With global oil demand expected to return nearly to pre-pandemic levels before the end of 2021, expect the Saudi economy to fire on all cylinders.. |
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