More Saudis finding work in Q3 as coronavirus exacerbates expat exodus
More Saudis are finding work at the expense of exiting expats as the coronavirus pandemic continues to affect the kingdom’s economy, according to new figures.
Q3 data from the General Organisation of Social Insurance (GOSI) showed that the number of Saudis in employment rose by 81,000 during the quarter while the number of foreigners declined by 236,000 over the same three-month period.
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This follows figures from General Authority for Statistics (GaStat) which said the number of expats in the labour market declined by 19,000, on a net basis, in Q2, as lockdowns forced many out of work.
As a result, this led to a net decline of around 155,000 in the number of registered private sector employees during Q3.
Jadwa Investment said in a research note that a majority of decline in foreign workers was seen within the SR1,500 or less salary band while most of the rise number of Saudis employed fell into the SR3,000 a month salary band.
By gender, both Saudi males and females saw a large rebound in the number of registrations in Q3, following a larger decline among females in Q2.
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The International Labour Organisation (ILO) has previously warned that women in the labour market were disproportionately affected by the impact of Covid-19, especially in high-income countries.
Jadwa Investment has previously said jobs prospects are likely to improve in the Saudi market after the unemployment rate jumped to 15.4 percent in the second quarter of 2020, up from 11.8 percent in Q1, mainly due to the impact of the pandemic.
The research note also said real estate prices in Saudi Arabia rose by 0.5 percent in Q3 year-on-year, and declined by 0.6 percent quarter-on-quarter. During Q3, residential real estate prices were up 2.1 percent, while commercial real estate prices declined by 2.5 percent, year-on-year.
Looking at regional prices, residential prices in Riyadh saw the highest rise in Q3, whilst prices in Makkah and the Eastern province were both down during the quarter.
Jadwa added that consumer spending rose by almost 34 percent year-on-year in September, and by 6.6 percent month-on-month. Meanwhile, more recent weekly data shows point of sale transactions slowing in October.
Saudi Arabia’s economy contracted 7% in the second quarter of 2020 from a year earlier as the impact of the coronavirus pandemic hit hard
The job figures follow the recent publication of Saudi Arabia’s 2021 pre-budget statement with the final version to be released in December.
In it, Saudi Arabia expects a budget deficit in 2020 close to 12 percent, declining to 5.1 percent of GDP in 2021, and be balanced only by 2023.
The kingdom has also adjusted its overall spending for 2020 by about 2 percent of GDP as the planned spending cuts – such as cancellations and delays to projects, cuts in operating expenses, the suspensions of the cost of living allowance – will be offset by the additional spending on healthcare and supporting the domestic economy amid the ongoing challenges posed by the global pandemic.
Saudi Arabia has also grappled with soaring inflation during the third quarter of 2020, reflecting the impact of higher VAT since July.
The VAT, introduced in 2018, was increased to 15 percent from 5 percent.
Latest data from the General Authority for Statistics (GaStat) showed that prices rose by 5.7 percent year-on-year in September, and declined by 0.2 percent month-on-month.
Saudi Arabia’s finance minister in May announced that the kingdom would triple its value added tax and halt monthly handout payments to citizens in new austerity measures amid record low oil prices and a coronavirus-led economic slump.
At the time, Mohammed Al Jadaan warned of “painful” and “drastic” steps to deal with the double shock of coronavirus and record low oil prices.
Saudi Arabia, the top crude exporter and the Arab world’s biggest economy, shut down cinemas and restaurants, halted flights, and suspended the year-round umrah pilgrimage in a bid to contain the deadly virus.
Saudi Arabia has extended by three months a stimulus program to help businesses still struggling to recover from the effects of Covid-19 but has rolled back its scope.
The initiative, which was due to expire in October, will now continue until January and will support half of all Saudis working in an organisation still affected by coronavirus, sectors including travel, sports and entertainment.
The program originally covered 70 percent of Saudi employees in firms with over five workers, and applied to a wider swath of activities across the private sector.