Egypt’s path to expand social protection, confronting inflation

Egypt adopted a new approach to achieve social justice by implementing comprehensive social policies to support the needy and enhance human security. 

 

This was combined with economic reforms and exchange rate liberalization to ensure stable inflation. 

 

 

In the FY 2023/2024 plan, Egypt boosted its social support and protection programs by allocating LE 529.7 billion. This allocation marks a 48.8 percent increase compared to the previous fiscal year.

 

Moreover, Egypt increased the minimum wage from LE 1,200 in March 2019 to LE 4,000 in September 2023, resulting in a surge of over 230 percent during that period.

 

Consequently, this wage hike is projected to impose a cost of approximately LE 2.5 billion per month on the state’s general budget, reaching a total of LE 25 billion by the conclusion of FY2022/2023.

 

The Egyptian government doubled the exceptional allowance for social pension holders to reach LE 600 up from LE 300, benefiting about 11 million citizens.

 

This means that the state’s general budget will cost about LE 3.3 billion monthly, and it will cost about LE 33 million until the end of the 2023/2024 budget. 

 

The minimum exemption from income tax was also raised from LE 36 thousand to LE 45 thousand, an increase of about 25 percent, or about LE 9,000, which costs the state’s general budget about LE 3.8 billion.