15/07/2026

BIZ & FINANCE WEDNESDAY | JULY 15, 2026

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S’pore economic expansion slows in second quarter

SINGAPORE: Singapore’s economic growth slowed in the second quarter, official data showed yesterday, as geopolitical tensions tempered gains from the artificial intelligence (AI) boom. The 5.7% expansion in April-June compared with the 6.3% seen in the previous three months, according to advance estimates from the trade ministry. Manufacturing was the main driver of growth, climbing 12.2% year on year and accelerating from 8% in January-March. This was “largely driven by output increases in the electronics and precision engineering clusters on account of strong AI-related demand for semiconductors and semiconductor manufacturing equipment respectively”, the ministry said in a statement. Robust global investment in artificial intelligence has lifted demand for chips, data centre equipment and other technology products, benefiting export-oriented economies such as Singapore. However, growth in the June quarter was partly offset by contractions in the chemicals and biomedical clusters, both key components of the manufacturing sector. The chemicals cluster was hit by “feedstock disruptions arising from the conflict in the Middle East”, the ministry said. Prime Minister Lawrence Wong warned last month that the economy could see slower growth and higher inflation in the second half of the year as the impact of the Middle East war deepened. The government maintained its 2026 growth forecast at between 2% and 4%. – AFP SYDNEY: Australian business conditions were steady in June as cost pressures eased following a US-Iran peace deal to end their conflict, a survey showed yesterday, although renewed hostilities have since sent oil prices higher again. The survey from National Australia Bank (NAB) showed its index of business conditions was steady at +3 in June for a third straight month. Confidence also improved to -5, from a deeply pessimistic -14 in May. That was attributable to positive news from the Middle East after the US and Iran signed an agreement to end a multi-month war that unleashed a global energy shock. Product price growth eased back to its February level in June and retail prices declined for the first time in seven years, the survey showed. However, tensions flared up again in the Gulf this week. The US renewed military strikes on Iran and reinstated its blockade of shipping via the Strait of Hormuz. Separately, a measure of Australian con sumer sentiment rebounded in early July. A Westpac-Melbourne Institute survey showed its main index of consumer sentiment rose 4.1% in July from June, when it fell 2.9%. The survey ran from July 6 to July 9 and thus closed before the latest spike in global oil prices. – Reuters US$50,000, from an expected US$40,000 this year. It pledged measures to counter persistently high inflation, a weak currency and elevated bond yields linked to the Middle East conflict, including fuel price caps, extended foreign exchange regulatory easing and low-cost policy loans in the second half of the year. Inflation was forecast at 2.6% for 2026, up from the previous 2.1% seen in January, amid high oil prices. For 2027, the ministry forecast economic growth at 2.2% and inflation at 2.2%. – Reuters Australian business conditions steady, sentiment improves

China’s exports soar more than expected in June o Overseas shipments 27% higher year-on-year A worker walking on scaffolding outside a mall in Beijing yesterday. China’s domestic demand remains a drag and retail sales are pretty flat, and fixed asset investment was negative last month, said an economist. – AFPPIC

vehicles, he added. Shipments to the United States rose 13.9% to US$43.5 billion, putting China’s trade surplus with its superpower rival at US$28.9 billion. Ties between Washington and Beijing have stabilised since US President Donald Trump visited Beijing in May, but the persistent trade imbalance remains a source of friction between the two. China is also locked in a simmering trade feud with the European Union, with which it recorded a trade surplus of US$32.9 billion in June, a rise from US$30.7 billion in May. June’s data “showcases the competitive ness and resilience of China’s manufacturing sector”, Zhang Zhiwei, of Pinpoint Asset Management, wrote in a note. “It also put further pressure on the trade tension between China and its trading partners, Europe in particular,” he said. The volume of rare earths exports sank 34% last month and 6.4% on-year in the first six months of the year as Beijing tightened restrictions on the critical elements. China accounts for around two-thirds of the total global production of the minerals. China’s overall trade surplus hit US$126 billion last month, up from US$105 billion in May, a gap that is worrying for European economies and other governments. – AFP, Reuters “While robust economic indicators, such as exports, driven by a semiconductor boom are clearly opportunity factors, there remain tasks that our economy needs to overcome at the same time,”Vice Finance Minister Lee Hyoung-il said. Asia’s fourth-largest economy delivered its strongest growth in nearly six years last quarter, driven by booming chip exports amid global surge in AI investment. The ministry also set targets of making South Korea one of the world’s four largest exporters and raising gross national income per capita to

BEIJING: China’s exports surged more than expected last month, with official data yesterday showing that the global AI boom helped fuel demand for chips and computing equipment from the world’s second-largest economy. The figures came despite global trade disruptions caused by the US-Israeli war on Iran, providing a much-needed boost to China, which is increasingly reliant on exports to fuel growth. Overseas shipments rose 27% year-on-year, beating the 19% forecast in a Bloomberg survey of economists. The General Administration of Customs (GAC) data also showed imports soared 36%, easily outstripping the 26.1% estimated in the Bloomberg survey, and well up from the 27.4% jump seen in May. “Trade values took another big leg up in June. This predominantly reflects the recent surge in semiconductor prices on the back of the AI boom,” Julian Evans-Pritchard, of Capital Economics, said in a note. The value of China’s semiconductor exports more than doubled from the same

month a year ago and rose US$2.7 billion (RM11 billion) from May, while data processing equipment shipments also rose 53.1% from a year earlier. But that expansion was “entirely a price story caused by the ongoing shortage of memory chips”, Evans-Pritchard said, noting that the volume of semiconductor exports actually fell year-on-year in June. “Surging semiconductor prices are playing a key role in pushing up import values”, rather than domestic consumption surging, he said. Xu Tianchen, a senior economist at the Economist Intelligence Unit in Beijing, said, “Continued export strength, mostly driven by AI, points to a better second half, coupled with a more expansionary policy mix, accelerated fiscal spending and mild monetary easing, as well as a de-escalation of the situation in the Middle East, which will benefit China through lower oil prices. “But domestic demand remains a drag. Retail sales remain pretty flat and fixed asset investment was negative last month.” Automobile exports jumped 69.6% on-year, reflecting strong demand for Chinese electric

South Korea lifts 2026 GDP growth forecast to five-year high SEOUL: South Korea pledged yesterday to swiftly advance artificial intelligence (AI) investments to bolster economic performance, as it raised its 2026 growth forecast to a five-year high of 3% on the back of a global semiconductor boom. economy’s potential growth rate to 3% from an estimated level below 2%.

As part of that effort, the government will fast-track three “mega projects” unveiled last month covering semiconductor, AI data centre and physical AI investments, the ministry said. Earlier this week, the government said it would increase 2027 budget spending by at least 10% to more than 800 trillion won (RM3.28 trillion), prioritising the mega projects and drawing support from stronger tax revenues from the semiconductor sector.

In semi-annual economic policy plans released earlier, the finance ministry projected this year’s economic growth at 3%, the strongest since 2021 and up from the previous forecast of 2% as well as last year’s 1.1% pace. The ministry said it would push policies aimed at three key goals, including lifting the