Cairo: A decision by Egyptian President Abdul Fattah Al Sissi to increase incomes of state employees has taken many Egyptians by surprise, as they have borne the brunt of the country’s recent austerity measures.

On Saturday, Al Sissi announced raising the minimum wage from 1,200 Egyptian pounds (Dh255.3) per month to LE2,000 and a 15 per cent rise in pensions.

State workers will also get a bonus of LE150 per month as part of the government’s steps to ease the effects of inflation triggered by economic reforms initiated in 2016, according to Al Sissi. The package of measures is due to go into effect in July, which marks the start of the fiscal year in Egypt. They will cost the country around LE60 billion, the Finance Ministry has said.

“These increases are like a fresh breeze on a hot day,” said Abdul Fattah Mahmoud, an 84-year-old pensioner. “They come to reward patience of people, who have faced wave after wave of price rises in recent years,” the ex-school inspector said.

In late 2016, Egypt floated its pound as part of reforms aimed at rejuvenating its ailing economy. The move resulted in a steep depreciation of the Egyptian pound and a spate of hikes in prices of different goods and services. The economic reforms also featured cuts in decades-old state subsidies on energy. The austerity steps earned Egypt a badly needed loan of $12 billion from the International Monetary Fund.

On Saturday, Al Sissi, who has been in office since 2014, voiced his appreciation of Egyptians for their patience. “You have helped Egypt to overcome the hard days without problems,” he said at a ceremony in Cairo.

Some Egyptians, however, sound worried the wage rises will play into hands of manipulative merchants at the local market.

“Since I opened my eyes to life, merchants have not missed the chance to raise prices of their commodities whenever state workers get a bonus or a wage increase,” said Radwa Madkur, a government employee. “I hope this time will be different, especially after we have been swept by unprecedented price increases in the past few years.

Al Sissi has advised his compatriots to change their spending habits. “There is a simple solution to high prices: The commodity whose price goes up, we have to boycott it,” he said.

Egypt, the Arab world’s most populous country with nearly 100 million people, has an estimated 7 million state employees and 9.5 million pensioners.