Saudi Arabia’s King Salman has announced that the Kingdom will spend 7 percent more next year, at around US$295 billion (1.1 trillion riyals). This breaks the previous record set this year, with budget spending at US$261 billion and it might spark concerns about the economy’s sustainability as the increase for next year includes a hefty bill for cost-of-living allowances introduced this year. The cost-of-living allowances were instituted at the start of this year, CNBC recalls in a report on the budget announcement, and they cost the budget an estimated US$13 billion. Their purpose is to stimulate economic growth, most directly through greater consumer spending, but also to strengthen support for Crown prince Mohammed whose policies aimed at an economic turnaround have met with mixed reactions. It’s no coincidence that the allowances target public servants and military personnel, besides pensioners and the poorest segments of society. The record-breaking budget means […]