Saudi Arabia’s annual budget statement, which is to be announced today, is expected to outline a series of tough measures designed to put the kingdom on the road to achieving financial balance by 2020.
Subsidy cuts, rationalised spending and new fees for expatriate workers are three key moves expected in today’s announcement.
The budget is likely to see the cost of living increase for many residents, but a number of analysts said the measures were sensible and necessary to address the kingdom’s economic woes in the wake of the oil price crash.
Costly subsidies on utilities such as water and electricity cuts will be scrapped according to sources cited by Arab News, a Jeddah based news agency, and fuel prices will also rise by 40 per cent.
Low-income Saudi nationals are to be recompensed for the hike in utility costs through a government-managed cash aid scheme, which will also be designed to reward those who are the most efficient in their use of energy. The government is expected to levy an additional fee on expatriate workers in the kingdom, likely to be a fixed amount of around 800 Saudi riyals ($213) a month, according to unconfirmed reports so far.
The measures are believed to be crucial in meeting the deep economic challenges faced by Saudi Arabia.
Economists said that the move to cut subsidies was a positive one as Saudi Arabia looks to balance its budget by 2020.
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