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Tuesday, 27 September 2016

MIDEAST STOCKS-Saudi tumbles on government austerity steps | Reuters

MIDEAST STOCKS-Saudi tumbles on government austerity steps | Reuters:

"Saudi Arabia's stock index slumped 3.8 percent on Tuesday after the government said it would cut ministers' salaries by 20 percent and scale back financial bonuses and perks for public sector workers under an austerity drive.

The new steps largely appear to formalise spending reductions introduced on an ad hoc basis since last year, and they will not by themselves make a huge difference to the government's deficit. NCB Capital estimated allowances accounted for about a quarter of the government's total salary expenses last year, which were 38 percent of its overall budget.

Nevertheless, the announcement underlined the bleak outlook for Saudi government spending, which is a key driver of consumption, as oil prices stay low."



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