Saudi King reverses public sector pay cuts

Saudi King Salman bin Abdul Aziz Al Saud on Sunday reinstated bonuses and special allowances for civil servants and military personnel that was cut in September when oil revenues were low.

The King signed a decree which said the pay cuts for ministers and government employees - the first in the country, where about two-thirds of working Saudis are employed in the public sector - had been in response to falling oil prices, which sank to a low of $28 a barrel, the BBC reported.

Under the cuts, ministers had their salaries reduced by 20 per cent and housing and car allowances for members of the advisory Shura Council were cut by 15 per cent.

Wage increases for lower-ranking civil servants were suspended and overtime payments and annual leave capped.

Salaries and allowances accounted for 45 per cent of government spending in 2015 or $128 billion and contributed to a record budget deficit of $98 billion, reports the BBC.

The King also ordered two months extra salary be paid to frontline military personnel taking part in Saudi-led operations in Yemen.