Bloomberg Intelligence analysis states the Saudi decision to lift the driving ban on women could generate as much income as Saudi Aramco IPO
The recent decree by King Salman bin Abdulaziz Al Saud allowing women to drive is set to boost economic growth, potentially adding about $90 billion to economic output by 2030. This is comparable to income generated by Saudi Aramco’s initial public offering, Bloomberg Intelligence research by Ziad Daoud, Middle East Economist, has found.
While the gains of this decision may take some time to be realized, greater female engagement in the labor market is likely to provide a substantial lift to the total supply of labor, 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 National Vision 2030 program.
The research finds that just adding 1 percentage point to the rate every year could add 70,000 more women a year into the labor 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 realized, the Kingdom’s GDP would be around $90 billion 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.
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