Economic Progress

Saudi Arabia is paying some citizens to help them deal with the increasing cost of living

A Saudi woman poses with Saudi riyal banknotes at a money exchange shop in Riyadh, Saudi Arabia January 20, 2016. REUTERS/Faisal Al Nasser

Saudi Arabia has just announced that it will pay some citizens monthly to help with the cost of living. Image: REUTERS/Faisal Al Nasser

Rosie Perper
Share:
Our Impact
What's the World Economic Forum doing to accelerate action on Economic Progress?
The Big Picture
Explore and monitor how Economic Progress is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Economic Progress

Saudi Arabia plans to give its citizens 50 billion riyals ($13 billion) in handouts to offset increasing costs of living, Reuters reported Sunday.

King Salman bin Abdulaziz Al Saud has ordered the government to pay out 1,000 riyals (about $266) to state employees each month in 2018.

“The allocation of 50 billion riyals for this decree indicates the leadership’s concern for the people’s comfort and quality of living,” Awwad bin Saleh Alawwad, the Minister of Culture and Information told local media.

Roughly 1.18 million Saudis are employed by the government.

Image: World Economic Forum

Pensioners and soldiers fighting on the frontlines against Yemen will also be given 5,000 riyal ($1330) bonuses, and the government will cover the cost of VAT in some cases, including first-time home purchases.

The King's payment plan hopes to compensate for a recent 5% tax increase on basic goods like food and utilities, and for nearly doubling the cost of gasoline.

Those price hikes were part of the Kingdom's efforts to tackle its budget deficit estimated at 195 billion riyals ($52 billion).

The government also announced plans to cut perks to royal family members, which angered many members of Saudi's elites.

On Saturday, authorities detained 11 princes after they gathered for a rare protest in front of the royal palace.

The protest stemmed from another royal decree that "halted payments by the state to members of the royal family to cover their electricity and water utility bills," Sheikh Saud Al Mojeb said in a statement to CNN.

Saudi Arabia is trying to tackle its debt

Saudi Arabia has announced several austerity measures to deal with the country's mounting debt.

Last month, Saudi Arabia revealed a 72 billion riyal ($19.2 billion) program to boost private-sector growth, Bloomberg reported.

Have you read?

“The only way to generate a recovery of growth in 2018 is through fiscal stimulus,” Crispin Hawes, a managing director at a London political risk consulting firm told Bloomberg.

In line with Vision 2030, which aims to "open up the country and diversify the economy," Crown Prince Mohammad bin Salman has led a crackdown on corruption by arresting 200 of the country's wealthiest individuals, whose assets are estimated to be worth $800 billion.

Saudi officials offered freedom to businessmen, royals and ministers detained in the purge in return for up to 70% of their wealth, which could net the Kingdom billions for funding the country's ambitious programs.

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Economic ProgressFinancial and Monetary Systems
Share:
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

World Bank: faster growth is needed to avoid debt restructuring in emerging economies

Karin Strohecker, Jorgelina Do Rosario and Libby George

February 26, 2024

About Us

Events

Media

Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum