DUBAI- Saudi Arabia's King Salman on Tuesday ordered the continuation of public sector cost-of-living allowances, before an state budget announcement expected to boost spending despite efforts to close a fiscal deficit.
In a pre-budget statement in September, the government said it would increase spending by more than 7 percent in 2019 to help cut unemployment and increase sluggish economic growth.
Under the Vision 2030 plan pushed by Crown Prince Mohammed bin Salman, Riyadh is seeking to create more jobs for Saudis, but businesses have been hit hard by tax rises and other steps to narrow the government's budget deficit.
Quotas and fees on hiring foreign workers have pushed hundreds of thousands of foreign workers to leave the country in the past 12 months, hurting domestic demand and causing the economy to shrink last year for the first time since the global financial crisis in 2009.
According to a royal order published by the state news agency SPA, civil servants and soldiers will continue to receive a monthly allowance of 1,000 riyals ($266). Allowances will also continue for pensioners and social security recipients, and student benefits will increase by 10 percent.
"That is for one fiscal year until completion of the study of the social protection system," the order said, without providing details.
($1 = 3.7508 riyals)
(Reporting by Hadeel Al Sayegh in Dubai and Stephen Kalin in Riyadh; Editing by Andrew Heavens) ((Hadeel.AlSayegh@thomsonreuters.com; +971566883310;))