Riyadh: The International Monetary Fund (IMF) has confirmed that Saudi Arabia's labor market reforms are delivering tangible results, citing falling unemployment, record-high female workforce participation, and rising private sector employment in its latest Article IV statement. The report was published on June 26, just days before the General Authority for Statistics (GASTAT) confirmed the Kingdom's rapid labor market progress with its Q1 2025 Labor Market Bulletin.
According to Saudi Press Agency, the preliminary findings of the IMF's annual consultation with the Kingdom highlight strong non-oil growth, effective structural reform, and sound fiscal policy. Crucially, the fund explicitly endorses the government's decision to adopt a higher fiscal stance in 2025 to maintain growth momentum in the face of lower oil prices.
On the labor front, the IMF describes a structural shift underway in Saudi Arabia's job market. This has been underscored by GASTAT's latest figures, which revealed that the unemployment rate among Saudi citizens continues to decline, now standing at 6.3%, a notable improvement compared to previous years and a sign that the economy is creating more opportunities for Saudi citizens.
The IMF also commended the significant increase in female participation in the workforce. This has reached 36.3% in Q1 2025 according to GASTAT's Q1 2025 Labor Market Bulletin, up from just 19.7% in 2018. This marks one of the most significant social and economic shifts in the Kingdom's recent history, reflecting both policy success and evolving societal norms. At the same time, GASTAT reports that Saudi female unemployment has dropped to a historic low of 10.5%, continuing a multi-year trend of progress in women's labor force outcomes.
The private sector is now playing a greater role in job creation, with an increasing number of Saudi nationals finding long-term employment opportunities outside the public sector. The IMF noted that this transition is being supported by ongoing reforms aimed at boosting productivity, skills development, and employer engagement.
The statement also highlights an increase in wages for high-skilled occupations, which reflects growing demand for advanced capabilities in fields such as engineering, digital services, and finance. While this is a positive indicator of labor market vitality, the IMF suggests it also points to areas where the Kingdom may need to expand talent pipelines to sustain competitiveness and moderate wage pressures.
Vice Minister of Human Resources and Social Development for Labor Dr. Abdullah bin Nasser Abuthnain, welcomed the findings: "The IMF's statement reflects the scale and depth of transformation underway in Saudi Arabia's labor market and confirms that our Labor Market Strategy is delivering real results."
He added that structural reforms are creating meaningful opportunities for our citizens, particularly women and young people, and positioning the private sector as the engine of long-term, sustainable job growth.
The IMF's praise for the changes taking place within the Kingdom's labor market coincides with the publication of the latest GASTAT Labor Market Bulletin, which highlights further progress in several important areas, such as overall employment, female labor participation, and private sector job creation.
Dr. Abuthnain said: "While we are proud of the progress achieved, we remain focused on ensuring every Saudi has access to rewarding work in a modern, dynamic, and globally competitive economy. Together, the IMF's endorsement and Saudi labor data paint a clear picture of reform momentum and real-world progress."
The IMF also confirmed that the decision to run a higher-than-budgeted fiscal stance in 2025 is "appropriate to prevent procyclicality that could exacerbate the growth impact of lower oil prices."
This endorsement supports continued investment in human capital, labor mobility, and long-term diversification, core to the goals of Vision 2030.
The Ministry of Human Resources and Social Development will continue to implement reforms that expand opportunities for Saudi citizens, attract top global talent, and foster a high-performing and inclusive labor market.