Economy

• Global AI-linked shares and chipmaker stocks plummeted following reports that China has developed its own deep-ultraviolet lithography tools. • This development challenges the long-standing monopoly held by the Dutch company ASML over essential computer chip supply chain techniques. • The market turmoil hit South Korea particularly hard, with the Kospi index falling 11.5% on Tuesday and another 6% on Wednesday, driven by losses at Samsung Electronics and SK Hynix.

Investors scramble to make sense of a shock Chinese challenge to the dominance of western chipmakersEven for the rollercoaster world of AI, last week was particularly volatile as investors scrambled to keep up with developments that threatened the dominance of the largest western chipmakers.It began with a double whammy. On Monday, the Chinese memory chipmaker CXMT floated on the Shanghai stock market, soaring by 466% in value to 3.3tn yuan (£365bn). Continue reading...

• Economist Levious Chaukura has warned that a surge of counterfeit products flooding Zimbabwe's informal market poses a direct threat to the national economy. • The influx of fake goods is stifling the growth of locally produced products and undermining domestic industries. • Chaukura emphasizes that this issue extends beyond economic crime, endangering consumer safety, national development, and existing jobs.

• South Korea is facing economic instability and market volatility driven by the rapid rise of the AI boom, testing its resilience compared to previous crises like the 1997 financial crash. • MSCI has once again declined to upgrade South Korea to "developed market" status, despite the Kospi index reaching record highs. • The decision highlights ongoing concerns among foreign investors regarding frictions in trading, hedging, settlement, and asset-transfer processes.

• Leading U.S. tech giants are investing massive amounts of capital into artificial intelligence, creating a high-stakes financial bet. • This surge in spending has entangled the broader U.S. economy and millions of retirement accounts with the success of AI technology. • The scale of these investments poses a systemic risk, as failure to generate significant returns could trigger widespread economic instability.

• The U.S. economy grew at a rate of 1.5% in the second quarter, falling short of expectations due to a decline in inventories and federal government spending. • Core inflation for June was reported at 3.3%, maintaining a primary focus for Federal Reserve policymakers as labor market indicators have stabilized. • Three regional Fed presidents cast dissenting votes, citing concerns over persistent high prices and a lack of progress toward the central bank's price stability mandate.

• Federal Reserve official Kevin Warsh stated on Thursday that the U.S. economy is showing "impressive resilience," though public sentiment largely contradicts this view. • Warsh acknowledged that the central bank cannot fix rising prices with a "magic wand," yet he maintains that the Fed is well-positioned to combat inflation through correct monetary policy. • Public data highlights a stark divide, with only 11 percent of Americans viewing inflation as "not so serious" and just 2 percent seeing it as a non-issue.

• The Euro zone economy grew faster than anticipated in the most recent quarter, driven by increased spending on artificial intelligence and rising consumer confidence. • Key economies including Germany, France, and Italy each expanded by 0.2%, while the Netherlands grew by 0.4%, doubling previous expectations. • Spain continued its trend as the bloc's top performer, recording a 0.7% growth rate, which surpassed the projected 0.6%.

Consumer spending remained resilient even as policymakers kept interest rates on holdThe US economy expanded at a sluggish 1.5% pace from April through June as rising imports weighed on growth. But consumer spending rose. And the Federal Reserve’s favored measure of inflation grew more slowly last month, but remained above the central bank’s 2% target.The commerce department reported on Thursday that growth in US gross domestic product (GDP) – the nation’s output of goods and services – decelerated from 2.1% in the first three months of 2026 and came in below economists’ expectations. Continue reading...

• The euro zone economy grew faster than anticipated in the last quarter, driven by increased investment in artificial intelligence, robust government spending, and confident consumers. • Key regional performers included Spain, which grew by 0.7% (beating the 0.6% forecast), and the Netherlands, which expanded by 0.4%, double the expected rate. • Major economies including Germany, France, and Italy each recorded a quarterly growth rate of 0.2%.

• South Korea's benchmark KOSPI index experienced a steep decline as the AI-driven investment boom faded and interest in semiconductor chipmakers dropped. • In response to the market volatility, Bank of Korea Governor Koo and heads of financial regulators held an emergency meeting late Wednesday to address the crisis. • The plunge highlights the vulnerability of the South Korean economy to shifts in global AI sentiment and the heavy concentration of its market in the chip sector.

• South Korea’s benchmark KOSPI index experienced a steep decline as the AI-driven investment boom began to fade. • The plunge was primarily driven by a drop in investor interest and confidence in major semiconductor chipmakers. • Frank Benzimra of Societe Generale noted that the market correction hit stocks with the highest leverage most severely.

• The Federal Reserve is projected to raise interest rates twice before the end of the year, signaling a shift toward tighter monetary policy. • Market analysts are using the CME Group's FedWatch tool, which tracks futures prices, to calculate the probability of these upcoming rate hikes. • This development is significant because historical data suggests that increased interest rates often trigger corrections in major indices like the S&P 500 and Nasdaq.

• President Donald Trump visited suburban Detroit on Monday, July 27, 2026, to deliver a speech focusing on the national economy. • During the event, Trump praised his administration's implementation of sweeping tariffs, framing them as a key driver of economic success. • The visit highlights the administration's strategy to leverage trade protections to bolster domestic industry and appeal to voters in industrial hubs.

• India's startup ecosystem is shifting its focus from high-profile funding rounds and unicorn valuations toward sustainable growth and structural maturity. • Key drivers of this evolution include the integration of AI, climate-tech investments, export reforms, and improved startup governance. • This transition matters as it signals a move away from "blockbuster" announcements toward long-term stability and the professionalization of employee stock option plans (ESOPs).

• Global markets remained steady on Monday, July 27, 2026, supported by a rebound in US durable goods orders and an increase in German business sentiment. • Investors are closely monitoring a US 5-year note auction scheduled for late Monday, as a high yield tail could signal growing nervousness regarding bond duration. • This caution is reflected in the S&P 500's flat performance on Friday, which saw a marginal gain of only 0.05% ahead of key economic data.

• 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.

• The Reserve Bank of India (RBI) reported in its July Bulletin that the Indian economy has successfully navigated external uncertainties, leading to a recovery in foreign investments. • This trend indicates a revival of global investor confidence despite ongoing risks from fragile geopolitics and persistent supply chain pressures. • The findings matter as they signal India's resilience and attractiveness as a destination for capital amidst a volatile global economic landscape.

• Thailand continues to navigate a complex geopolitical relationship with Cambodia, focusing on resolving long-standing border disputes. • Chinese President Xi Jinping has repeatedly urged both nations to prioritize diplomatic dialogue over confrontation to maintain regional stability. • The Thai government is simultaneously balancing these external tensions with domestic priorities, including sweeping infrastructure investments and cultural recognition efforts.

• Artificial intelligence infrastructure has emerged as a critical growth engine for China's economy, helping to prevent a "harder landing" during a period of significant economic weakness. • Data indicates that electronics and information technology sectors contributed more than half of the overall economic expansion during the April-to-June quarter. • This surge in AI investment is offsetting declines in other sectors, providing a vital buffer as the country navigates one of its weakest economic stretches in years.

• Southeast Asia is shifting its focus from expanding the reach of its digital economy to improving the quality, inclusivity, and resilience of its digital systems. • The region aims to build a more accountable digital foundation to ensure lasting public confidence as more livelihoods become dependent on these technologies. • Significant financial challenges remain, highlighted by Indonesia's estimated US$1.7 trillion financing gap required to meet Sustainable Development Goals by 2030.

• A new NAMI/Ipsos poll reveals that individuals who utilize the 988 suicide and crisis lifeline are successfully receiving the help they need. • Despite these positive outcomes, the data highlights significant gaps in overall public awareness and persistent barriers that prevent people from contacting the service. • The findings underscore a critical need for improved outreach and accessibility to ensure mental health resources reach those in crisis.

Rise in GDP follows a 0.1% decline in April, figures from the Office for National Statistics showThe UK economy grew by 0.1% in May, despite the impact of the Iran war on energy costs, official figures show.The Office for National Statistics said GDP rose, following a 0.1% decline in April. The figures were in line with a 0.1% rise in May that economists had forecast. Continue reading...

• Quarterly earnings reports from the five largest U.S. banks have challenged recession fears by showing unexpected strength in key financial sectors. • Investment banking revenue grew as corporate executives increased spending on mergers, acquisitions, IPOs, and debt issuance, signaling confidence in capital investment. • Consumer banking remains stable with contained credit-loss provisions, suggesting that households are successfully managing loan and credit card payments despite high interest rates.

Worse-than-expected expansion of 4.3% in three months to June comes amid concerns over lopsided economyBusiness live – latest updatesChina has posted worse-than-expected growth figures for the three months to June, with the economy expanding just 4.3% – one of its lowest quarterly readings on record.The rate, which came in under the government’s target of 4.5-5%, was one of the weakest since reporting on official quarterly GDP figures began in the early 1990s. Continue reading...

• Federal Reserve Chair Kevin Warsh is testifying before the House Financial Services Committee on Tuesday morning regarding the current state of the U.S. economy. • The hearing serves as a critical briefing for lawmakers to assess economic stability and the Federal Reserve's current monetary policy direction. • This appearance is particularly significant as it coincides with the economic agenda and appointments overseen by President Trump.

• The UN human Rights Office (OHCHR) reports that Sudan's war economy is creating a "self-perpetuating" cycle of conflict, where the exploitation of resources fuels ongoing violence. • The OHCHR is calling on warring parties and international corporations involved in the Sudanese commodity value chain to strictly comply with international law. • This situation is critical as the financial incentives derived from illegal trade and resource control provide the means for combatants to sustain prolonged military operations.

• Singapore's manufacturing sector experienced a 12.2% year-on-year growth in the second quarter of 2026, accelerating from 8.0% in Q1. • This surge was primarily driven by strong AI-related demand for semiconductors and semiconductor manufacturing equipment. • The manufacturing boom significantly boosted the broader economy, leading to an overall growth rate of 5.7% for the period.