Saudi Handouts' Cost May Exceed Government Estimates, BofA Says - Bloomberg

Saudi Handouts' Cost May Exceed Government Estimates, BofA Says - Bloomberg:

"Saudi authorities may have underestimated the financial cost of royal handouts dolled out to citizens complaining about rising prices, according to Bank of America Merrill Lynch.

The government will spend 61.8 billion riyals ($16.48 billion) on a package that included paying civil servants a monthly 1,000-riyal allowance for a year and restoring annual pay raises suspended in 2017, London-based economist Jean-Michel Saliba wrote in a report. Officials said the package would cost about 50 billion riyals.

King Salman issued the royal order this month after public complaints about the impact of higher fuel prices and the introduction of a 5 percent value-added tax. The measures will likely make the government more reliant on higher oil prices to boost revenue, chipping at the credibility of Crown Prince Mohammed bin Salman’s plan to end the economy’s addiction to hydrocarbons."



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