Saudi Arabia's gross domestic product exceeded $1 trillion for the first time in 2022 as its economy grew by 8.7 per cent, while the unemployment rate among citizens also fell sharply, according to data estimates released by the General Authority for Statistics (Gastat).
The kingdom's GDP at constant prices reached 4.2 trillion Saudi riyals ($1.12 trillion) last year, buoyed by non-oil sector growth.
The non-oil sector contributed about 2.3 trillion riyals to the kingdom’s GDP, accounting for 61 per cent of the total, while the hydrocarbon sector added 1.61 trillion riyals, or 39 per cent, Al Rajhi Capital said in a report.
Meanwhile, the unemployment rate among Saudi citizens fell to 8 per cent in the fourth quarter of 2022, from 9.9 per cent in the third quarter, according to government data.
This is the “lowest level based on data available since 2017", Al Rajhi Capital said.
The overall unemployment rate in the kingdom, for Saudis and non-Saudis, was at 4.8 per cent in the fourth quarter, down from 5.8 per cent in the previous quarter and 6.9 per cent a year ago, according to estimates from Gastat's Labour Force Survey.
“The impressive decrease in the unemployment rate was the result of a double effect of the decrease in labour force participation and, at the same time, the growth in employment,” Gastat said.
Saudi Arabia, the Arab's world's largest economy, recorded the highest annual growth rate among the world’s 20 biggest economies in 2022, according to the latest data from the Organisation for Economic Co-operation and Development.
Business activity in the non-oil economy of Saudi Arabia also hit an eight-year high in February as output growth in the kingdom strengthened, according to the Riyad Bank purchasing managers’ index.
Meanwhile, inflation in the kingdom softened to 3 per cent in February, from 3.4 per cent in January, Al Rajhi Capital said in its report.
The rise in the consumer price index for the month was mainly from housing, water, electricity and gas costs, which increased by 7 per cent annually.
The kingdom is in the middle of a major economic diversification drive under its Vision 2030 agenda, amid a push to reduce its reliance on oil and tap into other high-growth industries to boost its economy, create more jobs and attract private investment.
Among the key goals of the strategy is to lower the unemployment rate to 7 per cent, from 11.6 per cent, while also increasing the participation of women in the workforce to 30 per cent from 22 per cent.
“Strong economic growth and hiring by both government and private sector contributed to [the] decline in unemployment [in the fourth quarter],” Al Rajhi Capital said in its report.
The employment-to-population ratio for Saudi citizens in the fourth quarter rose by 1.6 per cent on a quarterly basis to 64.1 per cent, while the labour force participation rate for Saudis decreased by 0.1 per cent to 68.9 per cent, Gastat said.
Among the Saudis in the core working age population (aged 25-54), the unemployment rate fell by 2.5 per cent on a quarterly basis to 7 per cent.
“The decrease in the unemployment rate for the Saudi core working age population was mainly driven by a big drop in the unemployment rate for females, down 5.8 percentage points from 20.4 per cent in Q3 [third quarter of] 2022 to 14.6 per cent in Q4 2022,” it said.
According to Gastat's survey, 94.1 per cent of unemployed Saudis are ready to accept employment in the private sector.
Meanwhile, among unemployed Saudi nationals, 73 per cent of women and 89.1 per cent of men said that they would accept to work for eight hours or more a day.
