CAIRO, EGYPT- Egyptian President Abdel Fattah al-Sisi ordered a 50 per cent raise to the minimum wage on Wednesday, as prices soar two years into an economic crisis.

"Based on the state's duty to support the citizen under the current circumstances, I have directed the government to enact a package of social protection measures that include raising the minimum wage by 50 percent, to reach 6,000 pounds ($194) a month," Sisi said in a statement.

Egypt's President Abdel Fattah al-Sisi looks on during a meeting with the US Secretary of State and a delegation (not pictured) in Cairo on February 6, 2024. Egyptian President Abdel Fattah al-Sisi ordered a 50 per cent raise to the minimum wage on Wednesday, as prices soar two years into an economic crisis. AFP

The move includes salary increases for public sector doctors, teachers and nurses, and will see the tax exemption ceiling raised by 33 per cent for both public and private sector workers, his spokesman Ahmed Fahmy said.

Fahmy said it was introduced to "lighten the cost of living burden on citizens" -- buckling under the weight of an economic crisis that began in March 2022, and shows no signs of easing.

A delegation from the International Monetary Fund, which has agreed to a $3 billion loan facility for Egypt, recently emphasised the "critical importance of strengthening social spending to protect vulnerable groups" and "ensure adequate living conditions for low and middle-income households" in the country.

But loan tranches and programme reviews have been repeatedly delayed until Cairo moves forward on economic reforms -- including a "fully flexible exchange rate", the IMF says.

In a single year, the Egyptian pound lost half its value against the US dollar in successive devaluations.

But, according to analysts, the government has propped up the currency since early last year to stem runaway consumer prices.

With a severe foreign currency crunch crippling trade, the cost of living in the import-dependent economy has nevertheless continued to rise.

Inflation peaked at nearly 40 per cent last August, and has since eased to 35 per cent year-on-year, according to the latest official data.

Experts, however, say inflation figures -- calculated against the previous year's already soaring rates -- fail to reflect the actual rise in the cost of living.

In stores across the country, consumers report prices rising by the day, as the market holds its breath for the next devaluation.

The new minimum wage of 6,000 pounds is the equivalent of the average monthly income in 2020 for Egyptian families, two-thirds of whom lived below or right on the poverty line even before the current crisis.

Experts say the future is bleak, with JP Morgan recently announcing it would exclude Egypt from its index of government bonds, and ratings agency Moody's lowering its outlook on Egyptian bonds from "stable" to "negative".