OPEC heavyweight and Gulf allies believe the rise would increase investment without causing a jump in US shale output.
Saudi Arabia’s unemployment rate rose to 12.7 percent in the first quarter of 2017, continuing its steady climb as the economy grapples with the fallout of low oil prices, official data showed on Sunday.
The rising number of unemployed highlights the immense challenge Riyadh faces in meeting pledges to create jobs for its nationals amid a protracted economic slowdown.
The jobless rate is now more than a full percentage point above where it stood in the same quarter of last year when Crown Prince Mohammed bin Salman announced his Vision 2030 reform plan to diversify the economy beyond oil.
According to the Saudi Press Agency, the latest statistics show that the total number of Saudis seeking jobs is 906,552, of which around 219,000 are men and 687,500 are women.The plan aims to cut the unemployment rate to seven percent by 2030, among a raft of other targets.
Authorities are also introducing new fees and sector restrictions to encourage the employment of Saudis while reducing the kingdom’s reliance on its 11 million foreign workers.
“The data shows the economy is not creating enough jobs for the new entrants into the labour market. Job creation is going to be the main challenge for the reform programme,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
“The private sector is suffering from fiscal reforms and government spending is down. Despite the pressure on expatriates, we’re not seeing enough job growth among nationals to make up for their departure from the market.”
The Saudi economy has added about 433,000 jobs a year on average over the last 10 years, but non-Saudis have taken up most of those new jobs, according to research by Jadwa Investment.