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Saudi Arabia reinstates bonuses for state employees

Saudi Arabia has scaled back an austerity programme and restored bonuses and allowances for public sector workers after higher than expected revenue cut the country's budget deficit.10 May 2017

Minister of state Mohammed Alsheikh said the bonuses are being reinstated to stimulate economic growth.

"The announcement comes in the wake of the considerably better-than-anticipated budgetary performance in the first quarter of 2017, which is driven by strengthened expenditure management and higher revenue inflows. As a result, the actual deficit for the first quarter of 2017 is about 50% of the projected deficit in budget due to increases on revenue side and decreases on expense side," he said.

"From the macroeconomic perspective, the incremental increase of public sector workers’ disposable income will help to further boost positive sentiment as domestic demand recovers," Alsheikh said.

The cuts were made in September along with a 20% cut to ministers' salaries, Reuters reported, in an attempt to save money at a time of falling oil prices.

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