King Salman of Saudi Arabia has reinstated bonuses and special allowances for civil servants and military personnel that had been cut in September 2016 as part of austerity measures when oil revenues were low.
King Salman bin Abdulaziz Al Saud fired his civil service minister and put him under investigation for abuse of office.
The king also named his son Prince Khalid as new ambassador to Washington.
King Salman’s decrees saw a new national security centre created under the Royal Court.
He also ordered two months extra salary be paid to frontline military personnel taking part in Saudi-led operations in Yemen.
Prince Khalid is a fighter pilot who has trained in the US and carried out air strikes against ISIS in Syria.
The decree said the pay cuts for ministers and government employees – the first in Saudi Arabia, 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 in January 2017.
The oil price has since risen to about $52 a barrel and ministers said budgetary performance had been better than expected in Q1 of 2017.
Under the cuts, ministers had their salaries reduced by 20% and housing and car allowances for members of the advisory Shura Council were cut by 15%.
Wage increases for lower-ranking civil servants were suspended, and overtime payments and annual leave capped.
Salaries and allowances accounted for 45% of government spending in 2015, or $128 billion, and contributed to a record budget deficit of $98 billion.