Saudi stock market plummets after Riyadh announces salary cutbacks

Saudi Arabian stocks have dropped more than any other market in the world after the kingdom announces austerity measures to deal with a budget deficit.

None of the 169 stocks rose on the Tadawul All Share Index, which declined 3.8 percent on Tuesday, a drop which marked the highest loss since January.

The biggest drops were recorded in the hotel and media indexes.

The slump comes just one day after the country announced a string of cutbacks in its public bonuses and salaries of ministers. The cuts are the latest in a series of measures by the Saudi government to curb the kingdom’s financial perks.

Saudi Arabia, once known for its lavish public spending, has been hard hit by low oil prices and a costly military operation against its southern neighbor Yemen.

The kingdom is facing a budget deficit of nearly $100 billion caused by a sharp slump in oil prices as well as Riyadh’s rising army expenditure, a large amount of which is being funneled into a military campaign against Yemen, where at least 10,000 people have been killed and thousands more injured.