Citizen's Account aims to cushion the blow of austerity measures as kingdom tries to diversify its economy
Saudi Arabia has paid SR2 billion ($533.3 million) to citizens in the first month of a cash transfer program meant to cushion the blow of austerity measures as the kingdom tries to diversify its economy.
About 3 million households received the cash, deposited into the bank accounts of eligible low- and middle-income Saudis on Thursday, the official Saudi Press Agency reported, citing Labour and Social Development Minister Ali Al-Ghafees.
Half of the households received the maximum average monthly benefit of about SR938, he said, while the smallest payout was SR300.
Benefits are determined according to a family’s size and income, he said.
The kingdom’s “Citizen’s Account” program is intended to ease the impact of belt-tightening measures expected to take effect next month, including higher prices for gasoline and electricity and a 5 percent value-added tax. Raising the government’s non-oil revenue is a key part of Crown Prince Mohammed bin Salman’s “Vision 2030” plan to move Saudi Arabia beyond crude.
Officials announced an expansionary budget on Tuesday with total planned spending of SR1.1 trillion - the highest ever - but they also said inflation is expected to hit 5.7 percent next year after deflation this year.
A smooth roll-out of the cash transfers is key in a state built on trading government largess for political loyalty. In total, 3.7 million households representing 13 million people registered for the benefits, meaning almost one fifth of the applicants were turned down. Next week, the government will begin taking appeals, Al-Ghafees said.
Within an hour of the announcement, the top trending hashtag on Twitter in Saudi Arabia was “Citizen’s Account, 300 riyals,” with many social media users mocking the size of the minimum benefit. Last year, officials presenting the program had estimated that a family of six with a monthly income of less than SR12,000 would receive a monthly cash transfer of SR1,200, falling to SR1,000 for a family of six with an income of less than SR15,299.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.