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Royal Handouts Cheer Saudis But Show Struggle to Revamp Economy

  • King’s order restores annual pay raise to government workers
  • Ruler also orders 1,000-riyal monthly cost of living allowance
Bloomberg business news
Menacorp’s Nabil Al Rantisi discusses Saudi companies boosting pay for "eligible employees."(Source: Bloomberg)
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Saudi authorities said they’ll spend billions of riyals to help citizens offset the impact of a value-added tax and a surge in gasoline and utility prices, a move that will help ease public discontent while highlighting the kingdom’s struggle to overhaul its economy.

King Salman, in a series of royal orders early on Saturday, restored an annual pay raise for Saudi civil servants, suspended as part of attempts to rein in a hefty public-sector wage bill. He ordered a 5,000-riyal ($1,333) bonus for soldiers fighting in Yemen and granted Saudis working for the state an extra 1,000 riyals a month as a “cost of living” allowance for a year. The government will also pay part of the newly introduced VAT.