Despite falling oil prices, Saudi Arabia will continue paying its citizens cost-of-living allowances, the country's King Salman announced during the unveiling of its 2019 budget on Tuesday.

The budget will boost spending even as Saudi Arabia endeavors to close its budget deficit, indicating Riyadh's priority to spur growth in an economy hurt by lower oil prices. State spending will increase by more than 7 percent next year to 1.106 trillion riyals ($295 billion) from 1.030 trillion riyals, in line with a September pre-budget statement, according to the country's finance ministry.

Analysts believe the continued cost-of-living allowances, first established in January 2018 and estimated by officials to cost more than $13 billion, are intended to stimulate sluggish growth and shore up support for the royal family and Crown Prince Mohammed bin Salman after a controversy-ridden few months.

The royal allowances of 1,000 riyals a month ($266) are paid to civil servants and military personnel, and other allowances will continue for pensioners and those living on social security. Riyadh will also increase student benefits by 10 percent for the next fiscal year, the king announced.

The International Monetary Fund previously forecast the country's budget deficit to shrink to less than 2 percent of gross domestic product (GDP) next year in the event that the allowances were scrapped. The budget deficit for 2019 will now be 4.2 percent of GDP, according to the government's statement Tuesday.