Policies of Impoverishment and the Economic Recession in Saudi Arabia
Policies of Impoverishment and the Economic Recession in Saudi Arabia: The Need for Expansionary Policies and Lowering the Retirement Age The Saudi economy is moving in the opposite direction of the so-called promises of Vision 2030. The purchasing power of citizens keeps declining year after year, while wages have remained almost unchanged since the 1970s. Instead of addressing this growing income gap, the Bin Salman government has introduced a series of measures that increased the burden on citizens: raising the value-added tax (VAT) to 15%, removing subsidies on fuel and basic goods, increasing electricity tariffs, and multiplying fuel prices from 0.55 riyals (Saudi cents) to 2.5 riyals per liter, all without any corresponding wage increases or real compensation for households. In macroeconomics, when austerity policies are applied amid stagnant real income, overall demand contracts, a phenomenon known as self-induced recession, and that is exactly what has happened. Saudi f...