Saudi Arabia restores financial allowances for state employees

Saudi Arabia reinstated financial allowances for civil servants and military personnel on Saturday after better-than-expected budget figures, ending unpopular cuts to a key perk triggered by low oil prices and cheering the stock market.

The king issued a royal decree restoring "all allowances, financial benefits, and bonuses" following calls for protests in four Saudi cities over the weekend, adding a two-month salary bonus for forces fighting in the kingdom's intervention in Yemen.

The Saudi share index TASI gained 1.0 percent on Sunday, buoyed by expectations of a positive impact from higher disposable incomes on consumer sectors like retail and food.

In September, Saudi Arabia cut ministers' salaries by 20 percent and scaled back perks for public sector employees in one of the energy-rich kingdom's most drastic measures to save money after tumbling oil prices.

The measures were the first pay cuts for government employees, who make up about two-thirds of working Saudis, and prompted complaints about the impact of austerity on ordinary Saudis.

Under the Twitter hashtag "April 21 movement," Saudis circulated statements last week demanding the reinstatement of benefits, a halt to the sale of shares of state oil giant Aramco, a constitutional monarchy and the restoration of the powers of the religious police.

Security forces lined the streets of central Riyadh over the weekend, although no demonstrations appeared to materialize.