New Benefits to Offset Reform Costs for Average Saudi Household, Merrill Lynch Says

The average Saudi household will be sheltered from tough economic reforms by new royal grants and household allowance disbursements, a report on the Saudi economy by Bank of America Merrill Lynch (BofAML) said.

“The combination of royal grants and Household Allowance disbursements more than fully shelter Saudi households from the costs of fiscal reform costs, which should allow real private consumption growth to hover around 2017 levels,” the report, written by MENA Economist Jean-Michel Saliba said.  “Further out, Saudisation efforts and targeted stimulus should support consumption. This is especially as the bulk of reforms directly impacting Saudi households have already been carried out.”

The Kingdom recently announced new benefits for Saudis to offset the loss of subsidies and other needed economic reforms as part of the Kingdom’s Vision 2030 plan.

The report finds that about 3 million households in the Kingdom eligible to receive the household allowance known as the ‘Citizens Account’ which was announced in December 2017, which covers 10.6 million persons in total.

Expatriates, who will not receive benefits from the Saudi government, will bear the brunt of the reforms, the report said.