Middle East & North Africa Economics

Middle East Economics Update

8 January, 2018

Saudi bonuses to lift growth but raise fears over reform

The announcement in Saudi Arabia over the weekend that the government will pay bonuses to civil servants and military personnel means that fiscal policy will be slightly looser this year than had been envisaged in the 2018 budget and more supportive than in 2017. The stimulus, which is equivalent to around 2% of GDP, will support economic growth in the near-term but it’s a worrying sign that the Saudi authorities are backtracking on their commitment to economic reform.

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