Economy Update – Baghdad
The National Agency Council in Egypt has announced the implementation of a new wage increase, set to commence at the beginning of March 2024.
The council has established a periodic allowance for private sector workers, with a minimum increment of 3% of the insurance subscription fee, along with a baseline of 250 pounds per month.
For the first time, the minimum wage for temporary workers has been set, ensuring that hourly wages will not fall below 28 pounds, in accordance with definitions outlined in the labor law.
This wage adjustment is in line with directives from President Abdel Fattah El-Sisi, aimed at fostering social equity and raising the living standards of citizens.
This recent meeting of the National Agency Council followed remarks from Prime Minister Mustafa Madbouly, who stated that the government is contemplating a new social protection package designed to enhance salaries and pensions beginning in the next fiscal year, 2025-2026, effective from July 2025.
Minimum Wage Developments
The evolution of the minimum wage within Egypt’s private sector has been notable since its initial approval in January 2022, adapting to ongoing economic changes. The minimum wage started at 2,400 pounds, increased to 2,700 pounds in January 2023, then to 3,000 pounds in July 2023. It is projected to reach 3,500 pounds in January 2024, 6,000 pounds in May 2024, and ultimately 7,000 pounds from March 2025.
Key Economic Indicators
During the council meeting, Minister of Planning, Economic Development, and International Cooperation, Rania Al-Mashat, presented key indicators of economic growth for the first quarter of the fiscal year 2024/2025, highlighting positive advancements within non-petroleum manufacturing sectors. These sectors have transitioned from contraction to growth, resulting in a recovery of the industrial production index, which had faced a decline since the third quarter of fiscal year 2021/2022.
The minister also noted that private sector investments accounted for 63% of total investments during the first quarter, showcasing a continuation of this positive trajectory, which is anticipated to reflect in the Procurement Manager Index for January 2025. This index achieved its highest performance in four years, reaching 50 points and surpassing the neutral zone.
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