Good afternoon folks, and happy Wednesday. Despite the Ramadan news slowdown we have another busy issue for you, with all the latest on our bilateral investment agreement with Saudi Arabia, Google’s slide from workers’ paradise to purgatory, and the best things to watch and eat this week.

THE BIG STORY TODAY

#1- Saudi Arabia’s cabinet has greenlit a Egypt-Saudi bilateral investment agreement first proposed last September that is expected to help protect Saudi investors as they ramp up investment in Egypt. The agreement, which had initially been expected to come into effect by December, follows a directive from Crown Prince Mohammed bin Salman to the country’s Public Investment Fund to allocate USD 5 bn to investments in Egypt as part of the “first phase” of a wider investment program. The conclusion of the bilateral investment agreement could see investments rise to upwards of USD 10 bn over the next three years, according to previous statements by chairman of the Egyptian-Saudi Joint Business Council Bandar Al Ameri.

#2- New gov’t growth figures estimate GDP growth to accelerate to 4.5% in FY 2025-26: Planning and International Cooperation Minister Rania Al Mashat said that the government expects growth to accelerate to 4.5% in FY 2025-26, up from the government’s projection of 4.0% by the end of FY 2024-25, with growth coming “despite challenges posed by global protectionist trade policies,” she said in an interview with CNN.

THE BIG STORY ABROAD

As the int’l presses continue to digest US President Donald Trump’s first speech to theUS Congress since his inauguration — which saw Trump defend his recent tariff spree, lay out planned tax and spending cuts, and signal his interest in defunding the CHIPS Act — global headlines are turning toward Europe, as Germany prepares to relax decades-long restrictions on borrowing in order to fuel increased defense and infrastructure spending.

A fiscal sea change could be heading Germany’s way: Head of Germany’s center-right Christian Democratic Union (CDU) Friedrich Merz announced late yesterday that the CDU and its sister Bavarian party had reached an agreement with the country’s center-left Social Democratic Party (SDP) to overhaul constitutionally enshrined borrowing rules and establish a EUR 500 bn infrastructure fund in a bid to revitalize the country’s economy and fund higher defense spending. The move, which the parties will present to Germany’s parliament next week, would exempt defense-related borrowing from the existing 1% of GDP cap.

Market reax: German borrowing costs surged in the hours after the news, with the yield on the country’s 10-year bonds rising 0.19 percentage points to 2.67% — its largest one-day move since 2020. Meanwhile, the EUR rose to its highest level against the greenback in four months, reaching USD 1.071, as European defense stocks continued their rally that began last week. Deutsche Bank economists speaking to the FT noted the gravity of the move, saying that it represents “one of the most historic paradigm shifts in German postwar history.”

** CATCH UP QUICK on the top stories from today’s EnterpriseAM:

• Egypt’s USD 53 bn Gaza reconstruction plan receives Arab backing: Arab leaders endorsed Egypt’s USD 53 bn reconstruction plan for Gaza during yesterday’s emergency Arab League summit held in Cairo.
• Egypt’s non-oil business activity continued to see expansion for the second month running — but at a slower pace — “marking the first back-to-back improvement in business conditions in over four years.”

• Net foreign reserves rose to USD 47.4 bn at the end of February 2025, marking a USD 129 mn increase from January.

☀️ TOMORROW’S WEATHER- We’re expecting a warmer high of 22°C in the capital tomorrow, and a chilly low of 13°C, with a 17% chance of rain, according to our favorite weather app.