• Government borrowing costs across major economies climbed to multi-decade highs on October 1, 2026, as concerns over persistent inflation, further interest-rate increases and rising government debt intensified. The 10-year US Treasury yield reached 5.34%, its highest since 2002.
• The US 10-year yield rose almost 90 basis points during Q3, its largest quarterly increase so far this century. The sell-off has also spread globally, with French 10-year yields reaching their highest since 2002, UK 30-year borrowing costs touching 6% for the first time since 1998, and Japanese yields reaching multi-decade highs.
• Renewed increases in oil prices amid US-Iran tensions have added to inflation concerns and expectations of further monetary tightening. At the same time, investors remain focused on growing government borrowing requirements, with US debt exceeding US$40Tn and debt-to-GDP ratios at or above 100% across most G7^[1]
• Higher government bond yields can feed directly into borrowing costs across the economy, including mortgages, car loans and corporate debt. At the same time, a surge in debt issuance to finance artificial-intelligence (AI) investment is adding to bond supply and placing further upward pressure on yields.
• The bond sell-off reflects more than expectations for central-bank tightening, with persistent inflation, elevated sovereign borrowing and growing corporate debt issuance all contributing to higher yields.

(Source: Reuters)

^[1] The G7 economies comprise Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.

• Although the lingering effects of Hurricane Melissa and adverse weather conditions continued to weigh on economic activity, the contraction in the Jamaican economy moderated in the second quarter of 2026 (Q2 2026). According to the Statistical Institute of Jamaica (STATIN), real gross domestic product (GDP) contracted by 2.9% year-over-year (YoY), following declines of 7.1% in Q4 2025 and 4.1% in Q1 2026. Both the Goods Producing Industries (6.3%) and Services Industries (-1.8%) declined.
• Within the Goods Producing Industries, Agriculture, Forestry & Fishing (-15.3%) and Mining & Quarrying (-26.1%) recorded significant declines. Agricultural output was affected by dry conditions across most parishes and the lingering impact of Hurricane Melissa, with banana and plantain production falling by 72.0% and 77.5%, respectively. Mining & Quarrying continued to be constrained by lower bauxite and alumina production, which declined by 16.1% and 30.8%, respectively.
• In contrast, Manufacturing (+0.1%) and Construction (+0.4%) recorded marginal growth, supported by higher cement production and increased activity in civil engineering and building construction.
• Within the Services Industries, Accommodation & Food Service Activities (-12.3%) recorded the largest contraction, reflecting a 21.0% decline in foreign national arrivals and the continued closure of some hotels. Transport & Storage (6.1%) also declined amid lower tourism-related travel and a 15.1% fall in total airport passenger traffic. Electricity, Water Supply & Waste Management (-4.2%), Real Estate & Business Activities (-3.7%), and Information & Communication (-1.5%) also contracted. These declines were partially offset by growth in Financial & Insurance Activities (+3.0%), Wholesale & Retail Trade (+0.6%), and Public Administration & Defence (+0.3%).
• The Q2 contraction, nevertheless, represents an improvement from the 4.1% decline recorded in Q1, as the pace of contraction moderated across several hurricane-affected industries. Accommodation & Food Service Activities, for example, improved from a 16.6% contraction in Q1, while Manufacturing and Construction recorded growth. However, the continued weakness in tourism, agriculture and mining indicates that key foreign-exchange-earning and productive sectors remain under pressure.
• Looking ahead, the PIOJ projects the economy to contract by 0.5%–1.5% in July–September 2026, as lower production in several industries continues to weigh on activity amid the ongoing recovery from Hurricane Melissa and broader geopolitical and weather-related challenges persist.
• For Fiscal Year 2026/27, however, growth is projected within the range of 1.0%–3.0%, reflecting expectations of a broader recovery as productive capacity is restored and industries return toward normal operations. However, the recovery remains subject to downside risks, including elevated global energy prices and higher production and transportation costs associated with geopolitical tensions in the Middle East.

(Sources: STATIN, PIOJ, & NCBCM Research)

• Data released by the Statistical Institute of Jamaica (STATIN) shows the unemployment rate remained relatively unchanged at 3.4% in July 2026, compared with 3.3% in July 2025 and down from the 3.7% recorded in April 2026. However, this came amid declines in both employment and labour force participation.
• Jamaica’s labour force declined by 21,800 to 1,468,500 persons, with the labour force participation rate falling to 68.1% from 69.1% a year earlier and 68.4% in April. The decline was driven by reductions in both the male and female labour forces, with more persons moving outside the labour force.
• This was accompanied by a decline in employment, which fell by 1.5% to 1,419,200 persons. Male employment declined by 8,600 (-1.1%) to 767,000, while female employment fell by 13,300 (-2.0%) to 652,200. Youth employment recorded a sharper 6.4% decline, highlighting continued weakness among younger workers.
• Consequently, the number of persons outside the labour force increased by 3.3% to 687,300, largely reflecting an additional 14,800 youth exiting the labour force. The increase was recorded among both males and females.
• Additionally, the July 2026 survey showed a shift toward informal employment. Formal employment declined by 3.7% to 621,800 persons, while informal employment increased by 0.3% to 797,400. As a result, the informal employment rate rose to 56.2% from 55.2% in July 2025.
• Jamaica’s labour market results continue to reflect lingering weakness following Hurricane Melissa, although the relatively stable unemployment rate masks declines in employment and labour force participation. The latest results suggest that while fewer people are unemployed, a larger number have exited the labour force, particularly among youth, indicating that labour market recovery remains uneven.

(Sources: STATIN & NCBCM Research)

• The Panama Canal is expanding transit capacity as water conditions at Gatun Lake improve. The Panama Canal Authority (ACP) announced on September 28, 2026, that it will increase daily transit slots to 33 from 32 and raise the maximum authorised draft for vessels using the Neopanamax locks to 14.94 meters (49 feet) from 48 feet, following the recovery of Gatun Lake levels. The draft increase takes effect immediately, while a tenth daily Neopanamax slot will become available from October 15, 2026, according to Navigation Notice No. A-36-2026.
• The easing of restrictions reflects better water availability across the canal's watershed. The ACP attributed the improved operating conditions to rainfall recorded in the watershed during September, the implementation of water-saving measures at the locks and projections on the behaviour of Gatun Lake levels.
• The revised allocation keeps a mix of reserved and auctioned slots across all three vessel segments. The 33 daily slots will be distributed across 10 Neopanamax slots (nine through prior reservation periods and one via daily auction), 18 Panamax Super slots (17 through reservation periods and one via daily auction) and five Panamax Regular slots (four through reservation periods and one via daily auction).
• Alongside the capacity increase, the ACP has given customers greater flexibility in booking transits. The Canal administration eliminated the limit on the number of slots a customer can claim per date or week and now allows reservations on consecutive dates. Quotas not consumed by one segment will be offered to other segments under a defined substitution hierarchy, while slots won at auction will not count toward segment limits.

(Source: Newsroom Panama)

• Tourism continued to underpin economic activity in The Bahamas during the summer months. Tourist arrivals to The Bahamas rose 16.8% to 1.2 million in July 2026, led by a sharp increase in cruise passengers, according to the Central Bank of The Bahamas’ Monthly Economic and Financial Developments report for August. Sea arrivals increased 18.2% to approximately 1.0 million, while air arrivals grew 10.0% to approximately 200,000. For the first seven months of 2026, total arrivals rose 14.8% to 8.5 million, with sea and air visitors up 16.4% and 5.8%, respectively.
• Preliminary August indicators suggest that this momentum carried into the following month. International departures through Nassau rose 7.7% to 161,919, while short-term vacation rental operators sold 42,979 room nights, up 14.8% year-on-year. Average daily rates increased 5.8% to B$633.78 for entire-place listings and 5.1% to B$157.97 for hotel-comparable listings.
• However, stronger tourism activity was accompanied by higher foreign currency demand, which weighed on external reserves. Foreign currency sales for current account transactions rose by B$200.0Mn year-on-year to B$832.5Mn in August, driven mainly by credit and debit card payments (up B$93.6Mn) and non-oil imports (up B$59.1Mn). External reserves declined by B$122.9Mn during the month to B$3.10Bn, compared with a B$77.8Mn decline in August 2025, although the Central Bank expects reserves to remain well above international standards and adequate to support the currency peg to the US dollar.
• Domestic banking conditions softened in August, as liquidity declined and credit quality weakened. Bahamian dollar deposits fell by B$225.4Mn, largely due to private sector drawdowns of demand deposits, while excess reserves declined by B$227.1Mn to B$1.76Bn. Private sector credit rose by B$7.5Mn, as gains in consumer (B$20.1Mn) and mortgage (B$3.8Mn) lending offset a B$16.5Mn contraction in commercial loans. Consumer loan arrears increased 9.9% to B$141.6Mn, and total private sector arrears rose by B$5.3Mn to B$450.6Mn, or 7.0% of outstanding claims.
• Looking ahead, the Central Bank remains positive on the growth outlook, although risks persist. It expects the economy to maintain its growth trajectory through 2026, supported by tourism and foreign investment projects, but cautioned that higher fuel and import prices could add to inflationary pressures, while geopolitical tensions and uncertainty over global tariff policies remain risks to travel demand.

(Source: Eyewitness News)

• The US economy expanded at a 2.2% annualised rate in Q2 2026, supported by robust consumer spending and business investment related to the buildout of AI infrastructure. This was revised sharply higher from the previously estimated 1.5% pace.
• Consumer spending, which accounts for more than two-thirds of US economic activity, grew at a 3.8% annualised rate, up from the previously reported 3.4%. This marked a sharp acceleration from the 0.7% pace recorded in Q1 and helped support stronger overall growth.
• Business investment also remained strong, particularly spending associated with the buildout of artificial intelligence infrastructure. Equipment investment maintained double-digit growth during the quarter, providing another important source of support for the economy.
• Final sales to private domestic purchasers, a key measure of underlying domestic demand, increased at a 4.6% annualised pace, from the previously reported 4.2%, and well above the revised 1.8% growth recorded in Q1.
• Gross domestic income (GDI) rose at a 2.6% annualised rate, while the average of GDP and GDI, referred to as gross domestic output, increased 2.4%, up from the previous 1.8% estimate. However, higher inflation and gasoline prices continue to pressure household budgets despite the resilience in spending.
• Stronger-than-expected underlying demand suggests continued resilience in the US economy; however, elevated inflation and weaker consumer sentiment remain risks to the outlook.

(Source: Reuters)

• US inflation rose less than expected in August 2026, with the Personal Consumption Expenditures (PCE) Price Index increasing 0.3% month-over-month, below economists’ expectations for a 0.4% increase. July’s monthly increase was also revised down to 0.1% from 0.2%, easing some of the immediate pressure on the Federal Reserve to raise rates again in October.
• On an annual basis, headline PCE inflation stood at 3.4% in August, unchanged from a downwardly revised 3.4% in July. The monthly increase was driven partly by a 4.4% rebound in gasoline prices, while food prices were unchanged.
• Core PCE inflation, which excludes volatile food and energy prices, rose 0.2% month-over-month and 3.0% year-over-year. July’s annual core inflation rate was revised down to 3.0% from the previously reported 3.3%, partly reflecting changes in the methodology used to calculate several service-price components.
• Consumer spending remained strong despite higher prices and borrowing costs, surging 0.9% in August after a downwardly revised 0.1% increase in July. Inflation-adjusted spending rose 0.6%, while real disposable income was unchanged and the household saving rate fell to 4.1%, its lowest since November 2022.
• Financial markets scaled back expectations for near-term tightening following the data. The probability of an October Fed rate increase fell to roughly 41.5%, from 51.5% immediately before the release and 70% on Monday, September 28, 2026, according to CME’s FedWatch tool. US Treasury yields declined, and the dollar weakened following the report.
• The softer-than-expected inflation data gives the Fed greater scope to wait for additional information before raising rates again. However, still-elevated inflation and resilient consumer spending mean further tightening remains possible later in the year if price pressures persist.

(Source: Reuters)

• Despite higher topline growth, Jamaica Broilers Group Limited (JBG) reported a reduction in profits (-49.0%) for its first quarter ended August 1, 2026 (Q1 FY2026/27) relative to Q1 2025 due to higher administrative and operating expenses. However, the results signal its return to profitability following losses in each of the final three quarters of FY2025/2026 as the Group navigated its restructuring and divestment activities.
• Revenues increased 5.4% year over year (YoY) to J$19.29Bn, supported by strong demand for chicken products and fertile eggs across its operating markets, while net profit stood at J$813.38Mn, down from the restated J$1.60Bn profit from continuing operations in the previous corresponding quarter.
• Profitability from the Jamaican operations declined, with segment profit falling 14.1% YoY to J$1.80Bn, despite segment revenue holding broadly flat at J$14.70Bn. Higher depreciation charges, following the revaluation of land and buildings at the end of the prior financial year, were behind the softer segment results. That being said, management noted that demand for new products remains strong and the company will continue focusing on operational improvements for the financial year.
• The United States (U.S.) operations also remained profitable, but faced a more difficult operating environment following the sale of The Best Dressed Chicken, Inc. The segment generated revenues of J$5.80Bn, up 20.0% YoY, with external revenue (earned from customers outside the Group) rising 27% to J$4.60Bn. However, segment profit fell to J$557Mn from J$1.30Bn as the feed mill and hatchery operations operated at lower volumes without their former principal customer (the U.S. poultry business).
• Higher costs also took a bite out of Group profitability, as cost of sales increased 17.13% to J$14.53Bn, reducing gross profit 19.3% to J$4.77Bn and narrowing gross margin to 24.7% from 32.3%. Depreciation more than doubled to J$642Mn following the first full quarter of charges on revalued land and buildings, while administrative expenses increased by 8.6% to J$2.14Bn. Consequently, operating profits declined to J$1.84Bn (-44.8%), compressing margins to 9.5% from 18.2% in Q1 FY2025/2026.
• Finance costs also rose modestly (+2.2%), further dampening profit before taxation (-58.7% to J$1.05Bn), while net profit fell 49.0% to J$813.38Mn.
• Looking ahead, stronger margins and the return of its continuing operations to profitability provide a firmer foundation for FY2027. Nonetheless, the durability of the recovery will depend on sustained performance in Jamaica, the viability and refinancing of the remaining US operations, and tighter control of finance and tax costs. At the close of trading on September 29, 2026, JBG’s share price was J$14.31, representing a 16.8% decline year-to-date. At this level, the stock’s P/B of 0.73x is below the Main Market Distribution & Manufacturing sector average of 1.56x.

(Sources: JSE & NCBCM Research)

• Moody’s Ratings has completed a periodic review of the ratings of Barbados, keeping the sovereign’s B2 rating with a stable outlook after a rating committee held on September 17, 2026.
• Barbados’ credit profile continues to strengthen, supported by large primary surpluses, a declining government debt burden, improved market access and continued reform momentum under the Barbados Economic Recovery and Transformation (BERT) 2026 program and the new precautionary IMF Stand-By Arrangement (SBA). However, the improvement is not yet sufficiently broad-based or established to support a positive rating action at this review.
• Economic growth moderated in 2026 as tourism activity softened following the strong post-pandemic recovery. Real GDP growth slowed to 1.4% in the first half of 2026 from 2.8% in 2025, while stopover arrivals declined in the early part of the year. Nevertheless, visitor volumes remained above pre-pandemic levels, supporting tourism-related activity and foreign exchange earnings.
• The Government recorded a primary surplus of about 4.2% of GDP in FY2025/26, extending a multi-year record of surpluses above 4%, which helped reduce government debt to about 96% of GDP at end-March 2026, from above 100% previously. Debt is expected to fall to around 92% of GDP in FY2026/27 and roughly 75% by FY2030/31. The new 36-month precautionary IMF arrangement provides an additional policy anchor for fiscal discipline and for reforms to fiscal management, state-owned enterprises and resilience to natural disasters.
• Moody’s assessed Barbados’ economic strength at “ba2”^[1], balancing relatively high income levels and improved resilience against the economy’s very small scale, high openness and reliance on externally driven sectors. Institutions and governance strength was assessed at “ba1”, reflecting strong governance traditions and stronger fiscal institutions since 2019, partly offset by constrained administrative capacity and weak statistical systems.
• Fiscal strength was scored at “b2”, reflecting sustained debt reduction, stronger debt affordability and a lower share of foreign-currency debt, although the debt burden remains high. The country’s susceptibility to event risk was scored at “ba1”, reflecting exposure to external and climate-related shocks, balanced by adequate foreign exchange reserve buffers and renewed access to external capital markets.
• An upgrade could follow if continued fiscal consolidation and reforms reduce debt and improve affordability faster than expected, supported by stronger growth and competitiveness. Conversely, external shocks or weaker policy effectiveness that derail consolidation, reverse the debt trend or renew pressure on foreign-exchange reserves could prompt a downgrade.

(Source: Moody’s Ratings)

^[1] Moody’s scores each rating factor on a scale from “aaa” (strongest) to “ca” (weakest). Scores in the “ba” range sit just below investment grade and indicate speculative credit quality. Within that range, “ba1” is the highest score and “ba2” is the middle score. Barbados’ economic strength is therefore moderately weak, while its institutions and governance strength is one notch higher, just short of investment grade.

• Mexico’s exports rose by nearly 30% to US$549.40Bn in the January to August 2026 period, a record for the period, led by computer equipment. Growth was powered by a booming August, when exports reached a 40.4% annualized growth rate.
• The strong performance comes as Mexico pushes to raise regional content in its electronics exports, while President Claudia Sheinbaum said tariff talks with the US will continue this week.
• Meanwhile, the peso fell to 18 per US dollar on Monday as oil prices and concerns over the US Federal Reserve weighed on both currencies, just weeks after the return of the “super peso” had been proclaimed when it traded below 17.
• Last week, Banco de México held its benchmark rate at 6.50% for a third straight meeting, signaling a split from the Fed, even as the peso weakened toward its worst week since March.

(Source: Mexico News Daily)