Saudi driving decree could generate as much income as Saudi Aramco IPO
According to Bloomberg Intelligence analysis, Saudi driving decree could add $90bn to the Kingdom's economic output by 2030 – the amount what Saudi Arabia is trying to raise through the sale of a 5% share in Saudi Aramco.
The recent decree by King Salman bin Abdulaziz Al Saud allowing women to drive is set to boost economic growth in Saudi Arabia, potentially adding about $90bn to economic output by 2030.
This is comparable to the income to be generated by Saudi Aramco’s initial public offering, research by Ziad Daoud, Middle East economist, Bloomberg Intelligence, has found.
While the gains of this decision may take some time to be realised, greater female engagement in the labour market is likely to provide a substantial lift to the total supply of labour, causing GDP to grow faster over the next decade, the analysis states. Currently, only 20% of females in Saudi Arabia are economically active and increasing their participation rate is one of the main targets of the Saudi Vision 2030 programme.
The research finds that just adding one percentage point to the rate every year could add 70,000 more women a year into the labour market. While not all of these women may find work, even assuming a structural unemployment rate for women of 17% means the growth consequences are sizable.
This could lift potential GDP growth by up to 0.9 percentage points a year. Should this be realised, the Kingdom’s GDP would be around $90bn larger by 2030 than it would have been if the ban had remained in place. This amount is similar to what Saudi Arabia is trying to raise through the sale of a 5% share in Saudi Aramco.