The unemployment rate for Saudi citizens rose for the second consecutive quarter to 7.5% in 3Q 2025, hitting its highest level in a year, figures from Gastat showed. The rise is a notable reversal from 1Q, when the Kingdom hit a historic low of 6.3% — a figure that had met the 2030 target years ahead of schedule.

The breakdown

Saudi male unemployment climbed to 5%, its highest level since Q1 2022. Female unemployment also spiked to 12.1% (up from 11.3%), the highest in four quarters.

The Saudi labor participation rate — which reflects the percentage of employed working-age nationals — dropped to 49%, its lowest since 2021. Female participation also dipped to 33.7%.

What the numbers mean

“What’s notable is the unemployment rate rose while participation fell, with the overall data indicating that a lot of people are just not even entering the workforce,” Monica Malik, chief economist at Abu Dhabi Commercial Bank, told Bloomberg.

The reasons? Jobs may not be easy to come by, or more Saudis are taking time off or joining training programs, according to Malik.

Meanwhile, the economy continued to create jobs for expats: Non-Saudi unemployment remained unchanged at 1.4%, which could be a signal of a skill gap between the local and the expat workforce, Malik added.

Why it matters

Our labor market may not be out of the woods yet. With non-oil private sector growth slowing in 3Q, the economy is struggling to absorb new entrants at the pace required to hit the government’s newly revised, more ambitious unemployment target of 5%.

"The easy part of bringing unemployment down is done. The next phase is going to be more difficult, especially with the low oil price environment,” Malik added.

A contrarian view: Tis the season

Not everyone sees the rise as an alarm bell. Bandar Al Juaid, professor of economic media at King Abdulaziz University, told Asharq Business the 3Q spike is driven by "seasonal factors,” specifically the annual influx of new graduates hitting the market in the summer. Al Juaid dismisses the idea that oil price volatility is bleeding into the labor market, saying the friction is instead due to "sectoral shifts" as the workforce adapts to new flexible work patterns and tech-driven roles.

That would mean the long-term trend remains positive: Unemployment is still hovering near historical lows compared to the double-digit rates we saw a few years ago.

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