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Weapons of Mass Destruction (WMD)

Iran Press TV

Saudis face high unemployment, poverty

Iran Press TV

Fri Dec 11, 2015 2:37PM

A new report released on Friday has provided a gloomy outlook for Saudi Arabia's economy within the next 15 years.

The report that has been released by the global consulting firm McKinsey says the jobless rate in Saudi Arabia could exceed 20 percent by 2030.

It also says the real household income in the kingdom could plunge by another 20 percent over the same period.

Even if the Kingdom creates more private sector jobs for its citizens, there would still be a shortfall of 1.5 million jobs by 2030, according to the report titled "Saudi Arabia beyond oil: The investment and productivity transformation".

Unemployment is one of the critical challenges that could affect Saudi Arabia's oil and financial resources, said the report.

"The country can no longer rely on oil revenue and public spending for growth, in the face of a changing global energy market and a demographic transition that will significantly increase the number of working-age Saudis by 2030," it added.

At least 4.5 million new working-age Saudis are expected to enter the labor market in fifteen years. That requires the country to create three times the number of jobs it provided during the 2003-2013 oil boom, added the report.

By 2030, Saudi Arabia could accumulate a debt of about 140 percent of the country's GDP as a result of unemployment and the pressure from weak oil prices, RT reported.

Saudi Arabia is currently facing a budget deficit for the first time since 2009. It comes on the back of sliding crude prices, with oil sales accounting for almost 80 percent of the country's revenues.

There have been reports that companies working on infrastructure projects in Saudi Arabia have not been paid for six months or more as the country is trying to cut the cost of contracts in order to save cash. Analysts said such delays would negatively affect the employment rate.

In its regional economic outlook, the International Monetary Fund warned in October that Saudi Arabia might go bankrupt within the next five years if the government maintains its current policies. It urged that the country needs to adjust spending, RT's report added.

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