Algeria approves 2-7% increase in retirement pensions

ALGIERS, May 9 (Reuters) - Algeria's government has approved increases in retirement pensions ranging from 2% to 7%, the labour ministry said on Saturday, despite financial problems facing the oil exporting North African country.

The OPEC member's public finances have come under pressure after a sharp fall in global crude oil prices caused energy earnings, the main source of government revenue, to drop significantly.

President Abdelmadjid Tennoune has already announced a 50% cut in public spending and delays to planned projects in several sectors including oil and gas.

But Algeria, which subsidizes almost everything from foodstuffs to fuel and medicine, has kept its subsidy policy unchanged to avoid social unrest.

The government has also vowed to improve living standards for the poor by approving a plan to increase the guaranteed national minimum salary by 10% and scrap the total income tax for employees whose wages are equal or lower than 30,000 dinars ($238).

The rise in retirement pensions will be implemented in June with retroactive effect for this month, the labour ministry said in a statement. (Reporting by Hamid Ould Ahmed; Editing by Christina Fincher)