Saudi royal handouts to cost about SR50 billion

 

Saudi royal handouts to cost about SR50 billion
Riyadh would spend SR30 billion this year on the Citizens Account, a household allowance scheme designed to support low and middle-income Saudi families.

Published: Sun 7 Jan 2018, 8:00 PM

Last updated: Sun 7 Jan 2018, 10:05 PM

A package of handouts to Saudi Arabian citizens to compensate them for cost of living increases will cost the government about SR50 billion ($13.3 billion) this year, the information minister was quoted as saying on Sunday.
"The allocation of SR50 billion for this decree indicates the leadership's concern for the people's comfort and quality of living," Minister of Culture and Information Awwad bin Saleh Alawwad told the Saudi-owned Al Sharq Al Awsat newspaper.
On Saturday, the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz ordered a monthly payment of SR1,000 to state employees over the year in compensation for the rising cost of living after Riyadh hiked gasoline prices and introduced value-added tax. Pensioners and soldiers will also be given bonuses, while the government will bear the cost of VAT in some situations, such as the first purchase of a home.
Alawwad also repeated previous government statements indicating Riyadh would spend SR30 billion this year on the Citizens Account, a household allowance scheme designed to reduce the impact of austerity policies on low and middle-income Saudi families.
Saudi Arabia, the world's top oil exporter, roughly doubled domestic gasoline prices last week as part of reforms aimed at diversifying its economy. A five per cent VAT on a broad range of goods and services came into effect on the same day.
Private economists have estimated the government will raise about SR40 billion in 2018 through VAT. The government did not announce how much money it expected to make from the gasoline price hike, but previous statements by officials have suggested it would be in the tens of billions of riyals.
A state budget plan released last month projected a deficit of SR195 billion, or 7.3 per cent of gross domestic product, in 2018. The budget appeared to assume an average oil price of about $55 a barrel; Brent crude is now around $67, so Riyadh may be able to afford the royal handouts without any damage to its finances. 
 
 

By Reuters

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