King Abdullah announces $10.7 billion in pay raises, job creation and loan forgiveness schemes as he returns to country.
Last Modified: 23 Feb 2011 11:29 GMT
The steps, announced on Wednesday, include funding to offset high inflation and to aid young unemployed people and Saudi citizens studying abroad, as well the writing off some loans.
The move comes as governments in the region scramble to deal with pro-democracy uprisings sparked by youth unemployment and political repression.
As part of the Saudi scheme, state employees will see their incomes increase by 15 per cent, and additional cash has also been made available for housing loans.
No political reforms were announced as part of the package, though the 86-year-old monarch did pardon some prisoners indicted in financial crimes.
Abdullah was recovering in Morocco for four weeks, after undergoing surgery in the United States for a herniated disk which had caused blood accumulation around his spine.
During the king's absence, his brother, Crown Prince Sultan, was in charge of the Kingdom. Sultan himself has also suffered from illness intermittently over the last two years, and has spent long time abroad.
While analysts say that Saudi Arabia is unlikely to face the kind of popular protest movements seen in countries such as Egypt, Tunisia or Libya due to its estimated $400 billion in oil reserves, the government is still being pressured to address high youth unemployment and extensive housing issues.