Expat jobs to decline further in Saudi Arabia next year: Jadwa

Saudi Arabia is forecast to see further declines in net employment of foreigners in the second half of this year and over 2018, driven by a gradual increase in expat dependent fees and implementation of the expat levy, Jadwa Investment said in a recent report on Monday.

New jobs for expats dropped by 161,500 in the second quarter, with most of these declines seen amongst new jobs for non-Saudi females.

“Non-Saudi female net employment has been following a downward trend since the start of 2017,” said Fahad Alturki, chief economist and head of research at Jadwa Investment.

“We see this trend largely as a result of a number of expats choosing to repatriate their dependents prior to payment of the expat dependent fees which came into effect in July 2017,” he added.

Looking ahead, the firm expects to see “continued structural changes” in the employment patterns of non-Saudis in the next few years, given that dependent fees are expected to rise gradually until 2020.

An expat levy is also expected to start next year and rise incrementally towards 2020.

Meanwhile, net new jobs for Saudi citizens rose by 28,900 in Q2, around 40 percent of which went to Saudi females.

The Saudization rate in the local economy rose to 43.1 percent in Q2 2017 from 42.5 percent in the previous quarter, although this was mainly due to a rise in the number of foreign workers exiting the Kingdom, rather than improvement in the employment of Saudis.

“We expect the lifting of a ban on women driving, from June 2018 onwards, will not only help raise female participation and employment rates, but also create a number of new jobs,” Alturki said.

On a sector level, construction and trade were the most negatively impacted in Q2 2017, with around 85,000 expats leaving their jobs in both industries.

Saudi Arabia’s unemployment rate edged up 0.1 percent on a sequential basis to 12.8 percent in Q2 2017, Argaam earlier reported.