One portion of decree gives all state employees monthly bonus of $266 for one year (AFP)

Saudi Arabia's King Salman issued a decree on Friday that gave Saudi state employees, military personnel in Yemen and first-time homebuyers a set of bonuses and tax breaks.

One portion of the decree gave all state employees a monthly bonus of $266 for one year. Another ordered Saudi’s government to give a 5,000 riyal ($1,333) bonus to all Saudi military personnel fighting in Yemen. It remains unclear whether that bonus constitutes a monthly increase or a lump sum.

A Saudi-led coalition bombarding Yemen has closed air, land and sea access, in a move it claims is meant to stop a flow of Iranian arms to the Houthis, who control much of northern Yemen.

The blockade has cut food imports to seven million people on the brink of famine.

The third portion of the decree orders Saudi to pay the real estate taxes for first-time homebuyers that purchase houses of up to $226,642.

Saudi Arabia has aggressively changed its economy recently. On 1 January, the country changed the status of its national oil giant Aramco to a joint-stock company as part of a key step for an initial public offering (IPO) planned for later this year.

Last month, Saudi Arabia said its economy contracted for the first time in eight years due to painful austerity measures as it announced record spending to stimulate growth.

Crown Prince Mohammed bin Salman, the architect of the "Vision 2030" programme of reforms for a post-oil era, has announced a host of mega projects, including a futuristic megacity with robots and driverless cars, which require about $500bn in investments.

He said the 2018 budget will have the largest state spending in the kingdom's history, which was evidence of success in spite of low oil prices. He said improving living standards for Saudi citizens was a government priority, according to comments cited by state news agency SPA.

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