Economic Growth

• Singapore has increased its 2026 economic growth forecast to 4.5%-5.5%, up from the previous estimate of 2.0%-4.0%. • This upward revision follows a strong Q2 performance where the economy grew 5.9% year-on-year. • The growth is primarily driven by a surge in AI-related investments and a more resilient global economy despite conflicts in the Middle East.

TUC will urge John Healey to order ‘root and branch’ assessment of watchdog amid claims its forecasts downplay investment benefitsThe TUC is urging the new chancellor, John Healey, to order a “root and branch” review of the Office for Budget Responsibility, claiming the forecaster’s approach holds back investment.With Andy Burnham promising “good growth in every postcode”, the union umbrella body is calling on Healey to use his first budget on 28 October to re-examine the assessments of the watchdog. Continue reading...

• U.S. economic growth slowed unexpectedly during the second quarter, primarily driven by a widening trade deficit and the impacts of tariffs and conflict in Iran. • Despite the overall slowdown, consumer spending grew at a rate of 3.2%, supported by higher gas prices and larger tax refunds. • The divergence between slowing GDP and strong consumer activity suggests underlying economic resilience despite external geopolitical and trade pressures.

• Global economic trends show mixed signals, with US unemployment claims hitting a near 60-year low, indicating a highly stable labor market. • South Korea's economy experienced faster-than-expected growth, primarily fueled by a continuing boom in artificial intelligence chips. • Central bank policies diverged as the European Central Bank deferred rate hikes until September, while Russia and Hungary cut rates and Indonesia and South Africa held them steady.

New defence secretary emphasises military will be spending priority over other departments under BurnhamUK politics live – latest updatesWes Streeting has said increased defence spending would make “an enormous contribution” to economic growth as he emphasised that the military will be a spending priority for Andy Burnham’s government over other departments.The new defence secretary, in a speech at the Farnborough airshow, did not make any extra financial commitments but promised he would give the arms industry “clarity and confidence” in contrast to the row that contributed to the fall of Keir Starmer. Continue reading...

• Prompt injection attacks reached success rates between 50% and 84% across common LLM deployments in 2026, depending on the specific configuration. • Indirect prompt injections, which hide malicious instructions in trusted sources, accounted for over 55% of attacks and showed 20%–30% higher success rates than direct methods. • Multi-hop indirect prompt injection attacks saw a significant surge, increasing by over 70% year over year between 2025 and 2026.

• Singapore's economy grew by 5.7% in the second quarter of 2026, marking a slowdown compared to the growth seen in Q1. • The deceleration was primarily driven by eased expansion within the construction and trade sectors. • Despite the overall slowdown, the economy continues to be supported by strength in AI-related manufacturing.

• Myanmar is launching a strategic tourism recovery plan targeting visitors from China, Thailand, India, Japan, and South Korea to stimulate economic growth. • The strategy focuses on promoting spiritual tourism circuits, including the ancient temples of Bagan, Yangon's heritage sites, and Inle Lake. • To achieve an ambitious goal of 1.8 million visitors by 2026, the government is implementing visa reforms and improving regional connectivity.

• Falling crude oil prices are providing "disinflationary relief" to several Asian nations, including India, Thailand, and the Philippines. • This trend reduces pressure on external accounts for heavy energy importers, granting the Reserve Bank of India (RBI) and other central banks more flexibility to prioritize economic growth. • The impact remains uneven across the region, as some economies, such as South Korea, may still experience inflation driven by the AI boom.

• Vikas Khemani of Carnelian Asset Management projects that corporate India's earnings growth will remain robust at 14–16% for the year, supported by strong GDP growth and tax revenues. • Khemani views the current correction in the IT sector as a long-term buying opportunity, arguing that AI will act as a growth catalyst rather than a disruptor. • He dismissed concerns regarding a liquidity crisis, stating that slower deposit growth is being managed by the Reserve Bank of India to ensure system stability.

• Vietnam's economy grew by 8.39% in the second quarter (April-June), an acceleration from the 7.94% growth recorded in the first quarter. • The growth was primarily driven by strong performance in the construction sector and other key industries, bringing the total first-half rise to 8.18%. • This acceleration is critical as the government aims to reach an ambitious annual economic growth target of 10%.

• The Indian government released new economic indicators on July 2, highlighting the resilience of the national economy despite ongoing global uncertainties and geopolitical tensions in West Asia. • Key growth drivers include a 10.9% year-on-year increase in e-way bill generation for May, signaling robust trade, logistics activity, and a sustained movement of goods. • Easing prices for crude oil and fertilizers have mitigated temporary global energy pressures, supporting the government's fiscal consolidation roadmap for FY 2026–27.

• Ram Singh, Director of the Delhi School of Economics, stated that the easing of conflict in West Asia has reduced the downside risks to India's 6.6% growth forecast. • Growth prospects may be further bolstered by the moderation of El Nino effects and the resolution of ongoing geopolitical uncertainties. • The operationalization of Free Trade Agreements (FTAs) with 37 countries is expected to drive economic expansion by boosting foreign direct investment (FDI) and exports.

• The Opinions Editor argues that while immediate economic troubles have eased, the structural foundations necessary for sustainable, long-term growth remain absent. • Key sectors are struggling: high-skilled IT services are under pressure, manufacturing is failing to gain traction, and the financial sector is not creating enough low-to-medium skilled roles. • Job growth is currently concentrated in low-end services, exemplified by Zepto, which saw its delivery rider workforce surge from 49,278 in 2024 to 2.21 lakh in 2026.

• The U.S. Gross Domestic Product (GDP) grew at a rate that surpassed market expectations, signaling unexpected economic strength. • As a primary indicator of overall health, the GDP measures the total value of all goods and services produced within the country, adjusted for inflation. • This stronger-than-expected growth is significant because it is likely to influence future economic policy decisions and boost positive market sentiment.

• Iran's economy nearly stagnated in 2025, recording a marginal growth rate of only 0.2% while non-oil GDP experienced a contraction. • The slowdown is attributed to a series of conflicts, including a 12-day war with Israel in the summer and a 40-day conflict involving the U.S. and Israel in the winter, alongside January's nationwide protests. • Long-term structural crises, including severe international sanctions, chronic corruption, mismanagement, and declining investment, have further crippled economic activity.

• China is demonstrating economic resilience supported by a solid foundation and the emergence of new growth drivers. • Recent data indicates a slowdown in certain economic indicators since the second quarter, reflecting domestic structural adjustment pressures. • Many Chinese enterprises are currently facing operational difficulties attributed to an increasingly complex international environment.

• A new report reveals that India's labour productivity gap with China has widened significantly since 2000, despite the country's strong overall GDP growth. • India has failed to achieve the industry-led productivity transformation seen in peer nations like China and South Korea due to structural constraints and pandemic-related disruptions. • This gap matters because it indicates that India's economic growth is not yet driven by a high-efficiency manufacturing leap, limiting its global competitiveness.

• The OECD has warned that a prolonged conflict in the Middle East could significantly slow global economic growth and increase uncertainty. • Key risks include the potential for a global recession and rising inflation if the war continues into next year. • Asian nations are expected to be the most severely impacted due to their heavy reliance on energy supplies from the Middle East.

• The ongoing conflict in the Middle East has driven up oil prices, expected to slow US economic growth compared to a no-conflict baseline scenario, according to Deloitte analysis. • Despite pressures from elevated energy costs, US firms are unlikely to materially reduce investment plans due to resilient growth in AI and technology sectors. • Higher oil prices will affect US consumers through increased costs, though broader economic resilience from AI investments may mitigate some impacts.

• China Daily highlights the Regional Comprehensive Economic Partnership (RCEP), the world's largest free trade agreement, as increasingly vital for anchoring growth across Asia amid global uncertainties. • Covering 30% of global GDP and population, RCEP facilitates deeper supply chain integration and tariff reductions among 15 member nations including China, Japan, South Korea, ASEAN countries, and Australia. • The pact's expansion of trade rules supports resilience against trade wars and economic slowdowns, boosting intra-Asian commerce by an estimated 10-15% in key sectors.

First quarter output, driven by AI investment and government spending, rose as oil shock fuels inflation fearsUS gross domestic product (GDP) accelerated 2% in the first three months of 2026, though consumer spending is slowing as the war with Iran continues to impact energy prices.The last GDP reading for the fourth quarter of 2025 showed that US economic growth slowed to a 0.5% pace, largely due to a contraction in government spending after massive layoffs of federal workers last year. The federal government is down 355,000 workers, or 11.8% of the workforce, since October 2024, according to the Bureau of Labor Statistics. Continue reading...

• The U.S. market advanced 1.7% over the past seven days, continuing its strong performance with a 34% gain over the past year. • Earnings are projected to grow by 16% annually, reflecting broad-based economic expansion across sectors. • The sustained market strength indicates investor confidence in corporate profitability and economic fundamentals heading into late April.