Egypt signals wage increase in new budget to counter inflation pressures

CAIRO – 28 March 2026:  Egypt is preparing to introduce a substantial wage increase for public sector employees as part of the upcoming state budget, in a move aimed at easing the impact of rising living costs and supporting household incomes.

Prime Minister Mostafa Madbouly said the anticipated salary adjustments will be meaningful and designed to keep pace with inflation, stressing that improving citizens’ purchasing power remains a key priority for the government.

Speaking during a press conference, Madbouly highlighted that the new fiscal plan places strong emphasis on social spending, alongside measures to maintain economic stability amid ongoing regional and global pressures.

Finance Minister Ahmed Kouchouk confirmed that the draft budget includes a 30 percent increase in health sector allocations and a 20 percent increase in education funding, reflecting the government’s focus on strengthening essential public services while expanding support for workers.

Madbouly also noted that, despite rising global energy costs and external challenges, domestic markets continue to see stable supplies of goods, with price levels remaining broadly under control.

In parallel, the government is implementing targeted measures to manage public spending and energy consumption, including a temporary slowdown in fuel-intensive projects and operational adjustments across several sectors, as part of a broader strategy to safeguard economic growth and fiscal balance.

At the same time, Madbouly highlighted that Egypt is facing a sharp rise in energy import expenses due to escalating global prices linked to regional tensions. The country’s energy import bill climbed from $1.2 billion in January to $2.5 billion in March, driven by higher costs for fuel, petroleum products, liquefied natural gas, and crude oil.

He explained that the surge in international energy prices has directly increased the burden on the state budget, prompting the government to adopt a set of fuel-saving and cost-control measures to maintain financial stability.

As part of this response, the government has decided to temporarily slow down major national projects that consume large quantities of diesel and gasoline for a period of two months, with the goal of rationalizing fuel use while preserving economic momentum.

Madbouly also announced the introduction of a remote work system across both public and private sectors starting from the first Sunday of April. Under the new arrangement, employees will work remotely on the first Sunday of each week, except for service and production sectors, as well as universities and schools.

Meanwhile, Petroleum and Mineral Resources Minister Karim Badawi said the ministry has secured four gasification ships to strengthen energy supply capacity and ensure the country can meet its demand for natural gas and electricity during the current period.

Despite the external pressures, Madbouly reaffirmed that local markets remain well-supplied, noting that the availability of goods is stable and that price levels have remained largely under control.