Egypt’s Finance Ministry announced that the government plans to reduce the impact of financial and economic reforms on citizens in the draft state budget for the new fiscal year 2019-2020.
In a statement on Friday, the ministry said that the government will implement measures to improve the wages and pensions system, and increase the bill for wages and pensions by about LE59 billion, to be implemented by the beginning of July.
The wage increases include raising the minimum wage from LE1,200 to LE2,000 per month, and financing the biggest ever promotion schedule for state servants at an estimated cost of LE 1.5 billion, the ministry said.
The Ministry explained that the total deficit target in the draft state budget for the fiscal year 2019-2020, estimated at about LE445 billion is equivalent to 7.2 percent of GDP, compared to LE439 billion equivalent to 8.4 percent of the GDP expected during 2018 – 2019.
The GDP growth rate in 2019-2020 is expected to rise to six percent compared to an expected growth rate of 5.6 percent during the fiscal year 2018-2019, to reach target rates of 6.5 percent to seven percent annually in the medium term.
According to the statement, this increase in targeted growth is attributed to the positive effects of the government work in implementing its comprehensive reform program, based on economic and financial stability.
It added that this comes in parallel with implementation of structural reforms necessary to achieve comprehensive and sustainable growth rates that will create more employment opportunities for youth and women and decrease unemployment rates.
The Finance Ministry said that the government will work to support the efforts of the Central Bank of Egypt to reduce annual inflation rates to reach low annual rates “less than 10 percent”. The target is to reduce the unemployment rate to 9 percent in the upcoming fiscal year.
Edited translation from Al-Masry Al-Youm