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| Salman of Saudi Arabia. |
Saudi Arabia king, Salman bin
Abdulaziz Al Saud, has slashed ministers' salaries by 20
percent and abolished public sector bonuses in a bid to cut costs due to low
price of crude oil.
The new development will see housing and car allowances reduced by 15 percent, while overtime bonuses have been slashed by 25-50 percent of basic salaries, and vacations wouldn't be more than 30 days, with exception of soldiers fighting in Yemen.
Reacting to the development, Saudi analyst and editor of Al Arab News Jamal Khashoggi told Reuters that: "It's one more economic measure to balance spending. Of course people don't like it, but it's a sign of the times. Probably the teachers and many others will be affected by it. It shows why it's important for the private sector and Saudi GDP to diversify,” Khashoggi told Reuters.
Despite the current drop in oil price, which has affected oil producing countries, Saudi Arabia continues to increase production. In June, it pumped 10.6 million barrels per day, a new record.
Meanwhile, oil prices lost over a dollar on Tuesday, with Brent crude trading at $46.10 per barrel, while US benchmark WTI cost $44.69, as of 2:30pm GMT.
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