Egypt to raise stimulus by a third, implement minimum wage by Jan

Reuters, Monday 21 Oct 2013

Egypt's LE22.3 billion stimulus package announced in August to boost ailing economy will rise to LE29.6 billion

Interim Finance Minister, Ahmed Galal
Interim Finance Minister, Ahmed Galal (Photo: Ahram)

Egypt will spend LE29.6 billion ($4.30 billion) on a stimulus package to get its moribund economy going, a third more than previously planned, according to a Finance Ministry statement on Monday.

The original plan announced in August had provided for around LE22.3 billion in additional spending on a variety of projects, but the ministry said the increases would not push this year's budget deficit above the previous goal.

"This financial package will not increase the budget deficit of the state from the government target of 10 percent due to the success of reforms taken lately and the effects of the Arab aid packages," the statement said.

The economy of the Arab world's most populous country has been crippled by social and political turmoil since Hosni Mubarak was ousted in 2011 but has been helped in recent months by funding from several Gulf Arab States.

Saudi Arabia, Kuwait and the United Arab Emirates promised a combined $12 billion in loans, grants and fuel shipments after the ouster of the Islamist president Mohamed Morsi, prompted by mass protests.

The statement also said that the government plans to implement a minimum wage early next year which would cost the country LE18 billion annually.

"The government is committed to implementing the minimum wage starting from next January which will cost the public treasury around LE9 billion during the second half of the current financial year, rising to LE18 billion annually," the statement said.

Egypt's Trade and Industry Minister told Reuters earlier this month that Egypt plans a second stimulus package by early next year that will likely be equal or larger than the LE22.3 billion announced in August.

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