Fiscal pressures and ambiguous policy responses darken the outlook for Riyadh

A government declaration on 5 May that private companies will be allowed to cut salaries by up to 40%, while the public sector has so far been spared similar measures, underlines the extent that Saudi Arabia is more challenged by the coronavirus pandemic and an oil price slump that Riyadh itself has done so much to exacerbate than has previously been accepted. The daily Okaz on 5 May reported that Ministry of Human Resources and Social Development had linked salary cuts to a proportional reduction in working hours, provided the cut didn’t exceed 40%.