2023-09-17 19:04:31
Dubai, United Arab Emirates (CNN) – Economists ruled out that the Egyptian government would take a decision to move the exchange rate of the pound against the dollar, after the package of social protection decisions taken by President Abdel Fattah El-Sisi, yesterday, Saturday, stressing that the government is working to increase its dollar revenues to solve the demand. On the dollar to release production requirements and goods at the ports, before making any decisions to move the exchange rate of the pound.
Al-Sisi issued a package of social protection decisions that included increasing the exceptional cost of living allowance for state workers, doubling the exceptional grant for pensioners to 600 pounds ($19.42), and increasing the minimum wage to 4,000 pounds ($129.45), while raising the income tax exemption limit by 25 percent. %, reaching 45 thousand pounds ($1,456.32), and increasing the financial categories granted to the beneficiaries of the “Solidarity and Dignity” program, which number 5 million families, by 15%.
The package also included increasing the technology allowance for journalists registered with the union by 300 pounds ($9.71), and exempting defaulting farmers from paying interest, loan fines, and installments to the Agricultural Bank and the General Authority for Reconstruction Projects.
The head of the Plan and Budget Committee in the Egyptian House of Representatives, Fakhri Al-Fiqi, said that implementing the new increase in wages for state workers and pensioners does not require Parliament’s approval to begin implementing it except in the item on raising the income tax exemption limit by 25%, explaining that Parliament had previously approved a budget. The current fiscal year, which included a section for the general budget reserve, which will bear the cost of the new increase in wages and pensions, amounting to 60 billion pounds ($1.9 billion).
The allocations for wages and workers’ compensation in the budget for the current fiscal year 2023/2024 amount to about 470 billion pounds ($15.2 billion), an increase of 60 billion pounds ($1.9 billion) over the last fiscal year, with a growth rate of 14.6%, according to Ministry of Finance data.
Al-Fiqi confirmed, in special statements to CNN Arabic, that the additional cost of increasing wages and pensions will not affect the goals of the state’s general budget during the current fiscal year because of its funding from the general reserve. In return, about 20 million citizens of state workers, their families, and pensioners will benefit from this package. Pointing out that the increase in wages and pensions is the fourth since April 2022, and the second during the current fiscal year, with an average increase in income every 6 months, with the aim of alleviating the repercussions of the severity of the economic crisis.
Last March, the Egyptian President decided to increase the wages of employees and pensioners, raise the minimum wage, increase the income tax exemption limit, and disburse exceptional aid to 9.1 million families in the most vulnerable categories. These decisions cost the general budget 130 billion pounds (4.2 billion). dollar).
Fakhri Al-Feki stated that the latest social protection package came in response to the recommendations of the participants in the national dialogue to alleviate the burden on citizens, noting at the same time that the government’s success in managing the increase in wages and pensions 4 times in just 18 months is a result of the success of the economic reform program that the state adopted a year ago. 2016, which resulted in an increase in state revenues and directed them to the benefit of the middle class and the most needy groups, according to him.
The head of the House of Representatives Plan Committee rejected what was said about linking the decision to increase the wages of employees and pensioners and a possible new reduction in the exchange rate of the pound against the dollar, saying: “The state cannot give an increase in the wages of employees and pensioners, and then lower the exchange rate, so prices will rise.” again and lead to an increase in the inflation rate,” adding that the state is working to increase its dollar collections before making any decisions to move the exchange rate of the pound against the dollar. To meet the needs of manufacturers for production requirements, and to release goods accumulated at the ports, in order to avoid any sharp decline in the price of the local currency if a decision is taken to allow flexibility in the exchange rate, he said.
Egypt aims to increase its dollar earnings by about $70 billion to reach $191 billion by 2026 by increasing merchandise exports, remittances from Egyptians abroad, direct foreign investments, tourism revenues, the Suez Canal, and outsourcing services.
The Chairman of the House of Representatives’ Planning and Budget Committee expressed his optimism that the initiative to allow Egyptians abroad to import cars without customs duties and taxes would be renewed, and that it would achieve an increase in the state’s dollar revenue, in light of the great demand from those residing abroad – who number 12 million citizens – to benefit from the initiative. To achieve revenue from importing cars, it is expected that the initiative will achieve a higher outcome than the first version, which collected close to a billion dollars, in light of the great demands from Egyptians abroad to renew the initiative, especially with the decline in car prices globally after the recovery of the supply chain crisis.
The government agreed to renew the initiative to import cars for Egyptians abroad for another 3 months. The initiative allows residents abroad to import cars exempt from duties, customs and taxes in exchange for depositing a cash amount in foreign currency into the account of the Ministry of Finance at the Central Bank. In the first version, the initiative collected $900 million, according to data. Ministry of Finance.
Banking expert Mohamed Badra said that President Abdel Fattah El-Sisi’s approval of a package of social incentives comes in line with the letter of intent he signed with the International Monetary Fund on the necessity of taking decisions to protect the middle class from the repercussions of economic reform and the impact of the global economy, adding that the package of decisions will benefit millions of citizens. Of state workers and pensioners, which reduces the pressure on these groups.
Badra added, in exclusive statements to CNN Arabic, that the social protection decision package has nothing to do with taking a decision on the flexibility of the exchange rate, especially since the International Monetary Fund mission postponed its visit to Egypt from this month to the first quarter of next year, noting the importance of renewing the allowance initiative. By importing cars for Egyptians abroad, to increase the volume of remittances from Egyptians abroad.
Remittances from Egyptians abroad declined to $17.5 billion during the period from July 2022 to March 2023, a decrease of 26%, according to data from the Central Bank of Egypt.
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