EGYPT
Pay rises for millions of serving Public Servants and pensioners in Egypt have sparked fears of a new wave of inflation.
President, Abdel Fattah al-Sisi responded to demands by Government workers who said they could not cope with rising commodity prices.
Mr al-Sisi asked the Government to increase the pay for around six million PS employees and nine million pensioners by almost 15 per cent.
The increases will go into effect in July, the first month in the new fiscal year, and will cost approximately A$4.7 billion a year.
Economics Professor at Ain Shams University, Yumn al-Hamaki said the rise was necessary while the prices of all commodities kept shooting up.
“The Civil Servants and the pensioners are caught in the middle of the adverse effects of the national economic reforms,” Professor al-Hamaki said.
Egypt’s PS staff and pensioners were hard hit by the reforms, which included liberalisation of the exchange rate of the Egyptian pound and moves to eliminate subsidies for water, electricity and fuel.
This has led to a marked drop in the value of the pound against all foreign currencies, with the flow-on effect of a rise in the prices of commodities.
Food prices have almost tripled since November 2016, although there has been scant wage growth.
Most PS employees have been forced to moonlight in second jobs to put food on the table for their families.
However, economists said the pay rise would drive greater demand for commodities, which increases the likelihood of an even higher inflation rate.
Cairo, 9 April 2019
