Egypt increases monthly minimum wage by 50%

Egypt has launched its “largest social protection package” worth EGP180 billion ($5.83 billion) as part of its move to tackle mounting inflationary pressure, according to a local media report.

President Abdel Fattah El Sisi has ordered monthly minimum wages to increase by 50 percent to EGP6,000 from March as part of a new social protection scheme, Daily News Egypt reported.

The package also encompasses pension hikes and new initiatives to ease the financial burden on citizens.

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The scheme allocates an extra EGP15 billion for professionals such as doctors, nurses, teachers and university faculty members, as well as EGP6 billion to appoint 120,000 new medical professionals, teachers and other administrative workers.

The social package includes a 15 percent increase in pensions for 13 million residents worth EGP74 billion.

The social initiative includes raising the tax exemption limit for state, government, and private sector employees by 33 percent, from EGP45,000 to EGP60,000, at an annual cost of EGP5 billion.

Sisi had previously directed the government to double the “exceptional cost of living allowance” for public sector employees to EGP600 from EGP300 last September.

Despite the challenges, Egypt’s inflation decreased from 34.6 percent in November to 33.7 percent in December 2023, according to the state statistics agency Capmas. This comes after inflation reached a historic high of 38 percent in September.

Last week, the International Monetary Fund and Egypt agreed on the key policy elements of an economic reform programme, signalling the near completion of terms for releasing the $3 billion economic aid.

In January, the government raised the prices of several services, including electricity, metro tickets and telecommunication services, to contain a budget deficit.