Saudi Arabia's King Salman attends a Memorandum of Understanding signing ceremony in Putrajaya, Malaysia February 27, 2017. REUTERS/Edgar Su
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The decision by Saudi Arabia's King Salman to reverse cuts to financial allowances for civil servants and military personnel is being seen as helping the kingdom avoid recession this year while smoothing the path toward economic reforms. Last September, the government sharply reduced financial perks for employees in the public sector, where most Saudis work, in one of its most drastic steps yet to curb a huge budget deficit caused by low oil prices.Analysts have estimated that restoring the financial perks would put around 50 billion to 80 billion riyals ($13.3 billion to $21.3 billion) annually in consumers' pockets.Deputy Economy Minister Mohammed al-Tuwaijri said restoring the allowances was possible because Riyadh had made faster-than-expected progress in cutting its deficit. The gap was 26 billion riyals in the first quarter of 2017, well-below the government's projection of 54 billion riyals, he said.
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