Saudi Arabia to continue dispensing citizen allowances in 2019 as it sets to roll out budget
The kingdom is expected to announce an expansionary budget
Saudi Arabia, the biggest Arab economy, will continue handing out allowances to its citizens in 2019, similar to payments made this year, as the kingdom prepares to announce an expansionary budget.
King Salman issued a decree to dispense monthly allowances for a year to help lower the cost of living until social protection mechanisms are studied, state-run Saudi Press Agency reported on Tuesday.
The allowances "should continue to support spending by nationals in 2019, who have tended to be more shielded from the fiscal reforms," said Monica Malik, chief economist at Abu Dhabi Commercial Bank. "The signs of recovery in private consumption from the second half of 2018 was likely led by household spending by [Saudi] nationals."
The state employees and military personnel will get 1,000 riyals a month cost of living allowance for one year, according to the royal decree carried by SPA.
The Saudi monarch also ordered an allowance of 500 riyals for pensioners and 500 riyals for social security beneficiaries.
Saudi students’ allowances will be increased by 10 per cent, according to the decree.
The slew of government measures will help offset the increases in the cost of energy and electricity prices as well as the 5 per cent introduction of VAT this year.
The kingdom’s budget in 2018 was the biggest ever in its history as the world’s biggest oil exporter sought to propel economic growth. It is expected to reveal another expansionary budget for 2019.
Saudi Arabia is forecasting economic growth of 2.1 per cent in 2018 and 2.3 per cent next year.
"We expect to see non-oil economic activity gradually accelerate in 2019, largely supported by the stronger government spending," said Ms Malik.
Updated: December 18, 2018 05:21 PM