Egypt’s new budget promises pay raises for public workers

Egypt is taking bold fiscal steps to support its workforce as the government rolls out its draft budget for the 2025/2026 financial year. At the center of this strategy: significant salary increases for public sector employees, an enhanced cost-of-living allowance, and a nationwide minimum wage hike — all set to take effect on July 1.

Finance Minister Ahmed Kouchouk announced the changes earlier this week, positioning the plan as a key move to help citizens manage inflation and rising living expenses. The package includes pay increases across various segments of the public sector, expanded hiring plans, and record-breaking wage allocations in the national budget.

Starting this summer, government employees covered by Egypt’s Civil Service Law will receive a 10% annual raise. For workers outside that legal framework, the raise will jump to 15%. Both groups are guaranteed a minimum monthly boost of LE 150.

The cost-of-living allowance — a key financial buffer for lower- and mid-income earners — will also rise, moving from LE 600 to LE 1,000. Additional monthly incentives of LE 300 will be granted to all employees from Grade 6 to the Exceptional Grade, while the national minimum wage will climb to LE 7,000. Employees at the lowest pay grade will see total compensation rise by at least LE 1,100 per month.

To accommodate these wage increases, the new budget proposes an 18.1% rise in government salary spending — bringing the total to a historic LE 679.1 billion. But it's not just about current employees: the plan also includes funding for major public hiring campaigns.

The government plans to recruit over 75,000 teachers, 30,000 doctors, and 10,000 other public sector workers. These additions aim to ease long-standing strain on education and healthcare services while tackling unemployment among skilled professionals.

The fiscal strategy doesn't stop at salaries. The draft budget outlines projected revenues of LE 3.1 trillion — a 19% year-over-year increase — and total expenditures of approximately LE 4.6 trillion, up by 18% from the previous fiscal year.

Officials have also set ambitious macroeconomic goals, targeting a primary surplus of 4% of GDP and a continued reduction of debt held by public sector entities. Whether those targets are achievable amid expanding wage commitments and global economic headwinds remains to be seen.

The new budget paints a picture of a government trying to walk a fine line: easing pressure on citizens without derailing its fiscal stability. For public sector employees, the planned raises and incentives offer welcome relief. But for policymakers, the bigger challenge will be managing growth while ensuring that the country’s mounting spending commitments remain sustainable.

As the budget heads to Parliament for approval, all eyes will be on how the numbers translate into real-world impact — not just in the wallets of civil servants, but across Egypt’s broader economy.