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Egypt Responds to Soaring Living Costs, Doubling Minimum Wage to Tackle Crisis

Egypt has boosted its monthly minimum salary by 50% to 6,000 pounds ($194). The adjustment, which takes effect in March, is part of a 180 billion-pound “urgent social protection package.”

Egyptian President Abdel Fattah al-Sisi has authorized the administration to increase the tax threshold for public and private sector employees by 33%, from 45,000 to 60,000 pounds.

To address its financial deficit, Egypt’s government raised rates for a variety of services in January, including energy, metro tickets, and telecommunications.

According to Reuters, state workers have received a minimum salary hike of 1,000 to 1,200 pounds per month as part of the social protection package.

The measure aims to address the North African country’s cost-of-living difficulties, which could result in another big currency fall.

Most experts believe Egypt will devalue the pound again in the first quarter of this year. Egyptian entrepreneur Naguib Sawiris has criticized the delay in executing the planned pound depreciation in the country.

The country’s fragile economy, which was already hampered by the Gaza issue, saw a drop in tourism and reduced shipping through the Suez Canal, which is a major contributor to foreign currency reserves.

On Thursday, the International Monetary Fund (IMF) announced an agreement with Egypt on major policy elements of an economic reform program, indicating progress towards sealing a deal to improve a $3 billion loan.

Egypt has agreed to shift to a flexible exchange rate system, reduce governmental participation in the economy, and boost private sector growth.

Nonetheless, payouts under the program are subject to eight evaluations, with the first and second reviews originally set for the previous year but postponed due to the steady exchange rate.

Written by PH

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