‘Fresh social support package worth $2b annually’

The new social support measures announced by President Abdel Fattah El Sisi on Saturday will cost an estimated LE60 billion ($1.94 billion) annually, according to Minister of Finance Mohamed Maeet.

The new package of raises in wages, grants, and bonuses will go into effect on October 1, Maeet added in a statement on Sunday.

The increase in the monthly exceptional cost of living allowance will benefit 4.5 million state employees and cost LE16.4 billion annually, the minister added.

The exceptional grant for 11 million pensioners will add an LE32 billion annual cost that will be borne by insurance and pension funds, Maeet said.

The 15-per cent-increase in Takaful and Karama benefits will cost the state treasury LE4.5 billion, Maeet added.
The minister went on to say that the technology allowance for journalists enrolled in the Press Syndicate will increase by LE300 as of next month.

On Saturday, President Sisi announced a series of measures to alleviate the financial strains on the public, including raising the minimum wage for public sector employees from LE3,500 to LE4,000.

He also raised the annual income tax exemption threshold by 25 per cent to LE45,000.

Egyptians have been hit hard by a wave of inflation started on the heels of the Russian attack of Ukraine in February 2022. The annual headline inflation peaked at 39.7 per cent in August.

Inflation is projected to average 32.3 percent for 2023, a significant increase from the averages of 5.2 per cent in 2021 and five per cent in 2020.

To mitigate the burden on Egyptians, the government announced that the budget for subsidy and social protection networks would increase from LE358.4 billion in fiscal year 2022-2023 to LE529.7 billion (around $17.1 billion) in FY2023/2024, an increase of 48.8 per cent.

The government has recently launched various other initiatives to secure more foreign currency to bridge a financing gap estimated at $17 billion through 2026.

The country seeks to bring in $191 billion in annual revenues by 2026, up from the current figure of $70 billion.