Egypt Minimum Wage Sees 50% Surge in Response to Economic Challenges

A 50% increase in the minimum wage has been announced by the Egyptian presidency to 6,000 Egyptian pounds (EGP) ($194) starting March 2024, as part of a significant “urgent social protection package” totaling EGP 180 billion, as reported by Reuters.

The decisions also encompassed a wage boost for workers in state and economic entities, effective March, with a minimum increase ranging between EGP 1,000-1,200 ($32-$39).

These developments coincide with concerns about a potential devaluation of the Egyptian pound and anticipated high inflation, given the country’s recent depreciation of its currency. Analysts have suggested that the 200 basis points increase in the Central Bank of Egypt’s interest rate last week may signal a forthcoming devaluation.

The official exchange rate for the Egyptian pound has remained fixed at EGP 30.85 to the dollar since March of 2023. However, on the black market, the currency was trading at EGP 71 to the dollar earlier in February. Subsequently, it has shown some strengthening and is currently around EGP 60 to the dollar.

As part of the social package, the presidency announced a 33% increase in the tax exemption limit on annual incomes, from EGP 45,000 ($1,455) to EGP 60,000 ($1,940). Additionally, allowances for beneficiaries of the Takaful and Karama programs, providing monthly cash support to the poorest families, will see a 15% increase each month.