Egypt Increases Minimum Wage by 50% to Tackle Rising Cost-of-Living
Egyptian President Abdel Fattah al-Sisi has instructed the government to increase the tax threshold by 33%, raising it from 45,000 pounds to 60,000 pounds for all employees in both the public and private sectors.
This decision comes on the heels of the Egyptian government’s recent price hikes for various services, including electricity, metro tickets, and telecommunication services, aimed at managing the country’s budget deficit.
As part of a broader social protection package, wages for state workers will also see a minimum increase ranging from 1,000 to 1,200 pounds per month, according to Reuters.
The objective behind these measures is to alleviate the cost-of-living challenges faced by citizens in Egypt, which is potentially bracing for another significant currency devaluation.
Many economists anticipate a devaluation of the Egyptian pound in the first quarter of the year. Notably, Egyptian billionaire Naguib Sawiris has criticized the delay in implementing the much-awaited devaluation.
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Egypt’s economy, already fragile due to various factors including the recent Gaza crisis, has seen a decline in tourism and reduced shipping through the Suez Canal, impacting foreign currency reserves significantly.
The International Monetary Fund (IMF) announced a breakthrough on Thursday, stating that it had reached an agreement with Egypt on the crucial policy elements of an economic reform program. This signals progress toward finalizing a deal to enhance a $3 billion loan.
The agreement entails commitments from Egypt to transition to a flexible exchange rate system, reduce the state’s intervention in the economy, and foster private sector growth.
However, the disbursement of funds under the program is subject to eight reviews, with the first and second reviews originally slated for the previous year but postponed due to the stable exchange rate.
