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Fitch Expects More Bank of Jamaica Rate Cuts in 2025 Published: 03 June 2025

  • Fitch anticipates that the BOJ will reduce rates by another 25bps to 5.50% on June 20, 2025. It further expects that the BOJ will lower the policy rate by an additional 75bps to 5.00% by December 2025.
  • These expectations are based on increased clarity on the impacts of trade policy for domestic price stability and a favourable inflationary outlook.
  • While uncertainty continues to dominate the international economic landscape, the BOJ’s statement on the limited first-round impacts of tariffs is a strong indicator of the bank’s potentially dovish posture in the near term.
  • With inflation anchored near the midpoint of its target range1, private sector inflation expectations stable at 7.3% in March 2025, lower projected energy prices, and wage pressures moderating against a soft growth backdrop, inflation is expected to ease to 4.5% by the end of 2025 and average 5.0% for the calendar year 2025 – the midpoint of the BOJ’s target range.
  • That said, risks to the inflation and interest rate forecasts are balanced, with the possibility of geopolitical tensions creating supply chain challenges and subsequent price pressures. Additionally, significant weather-related shocks could create supply-side inflationary pressures. Should these risks materialise, the BOJ may opt to pursue a tighter-than-expected monetary policy stance.
  • Conversely, downside risk from sluggish growth numbers and flagging external demand could incentivise the BOJ to pursue more expansionary monetary policy through the end of 2025, should it feel confident that it could satisfy its price stability mandate.

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1Headline inflation was at 5.3% year over year (YoY) in April, and core inflation has now held below the 6.0% threshold for 22 consecutive months.

(Source: Fitch Connect)

Jamaican Government Placing Increased Focus on Bauxite Published: 03 June 2025

  • Minister of Agriculture, Fisheries and Mining, Hon. Floyd Green, recently announced that the Government will intensify its focus on the bauxite and alumina sector to enhance efficiency and promote growth. This statement was made during the Bauxite/Alumina Industry Day at the Jamaica Bauxite Institute (JBI) in St. Andrew on May 30, 2025.
  • Minister Green acknowledged the industry's decline over recent decades but emphasised its continued significance to the economy. He highlighted a 4% increase in aluminium output for 2024, which is estimated to have increased to 1.337Mn tonnes, up from 1.286Mn tonnes in 2023. Additionally, Jamaica collected approximately $623Mn from bauxite royalties in the 2024-2025 fiscal year, marking a considerable increase from the previous year.
  • The Minister indicated that the Government aims to play a more proactive role in the sector's growth. He pointed to the need to assess the quality of bauxite reserves, address issues related to ageing infrastructure and invest in improvements to increase operational efficiency.
  • Furthermore, Jamaica's red mud, which is believed to contain around 40Mn tons of iron oxides and rare earth elements, presents a potential source of revenue for the mining sector. This, therefore, increases the need for Jamaica to seek partnerships for investing in the extraction of these rare earth elements for the benefit of the population.
  • Several companies are already taking steps to enhance their operations. For instance, JAMALCO is focusing on strategic investments to streamline processes related to bauxite and energy generation, while Windalco is working on improving its haul road.
  • Further, Andre Lindsay, General Manager of the JBI, noted that the Institute is reorienting its efforts toward researching the extraction of rare earth elements from bauxite residue and aims to direct work in this area throughout the fiscal year.

(Source: JIS)

Brazil rules out bird flu case on a commercial farm in Rio Grande do Sul state Published: 03 June 2025

  • Test results for a suspected bird flu outbreak on a commercial farm in the town of Anta Gorda in Rio Grande do Sul state came back negative, according to an analysis of samples released by the Brazilian Agriculture Ministry on Monday. This was the only potential case currently under investigation on a commercial farm in Brazil, the world's largest chicken meat exporter.
  • The results were negative for both bird flu and Newcastle disease, the document showed. Both these diseases may trigger trade bans.
  • On May 22, Brazilian authorities declared a 28-day bird flu observation period following the full disinfection of the farm where the first outbreak was detected. In the days following the first case in Brazil, 1.7 million eggs were destroyed in Rio Grande do Sul, according to the state's department of agriculture.
  • Teams that run the farm where bird flu was detected buried waste that had first been incinerated to prevent the spread of the virus. The virus killed around 15,000 birds and the farm culled an additional 2,000.
  • Brazil hopes that by the end of the observation period, the country's chicken farms can be free of bird flu disease, provided no new cases are confirmed.
  • Controlling the outbreak would allow Brazil to resume trade with partners that have suspended chicken imports from the country, such as China and the European Union, after the first and only outbreak was confirmed.

(Source: Reuters)

Forex Challenges Drive Up AS Bryden’s Costs Published: 03 June 2025

  • Difficulties in accessing foreign exchange have forced AS Bryden and Sons Holdings Ltd (ASBH) to increase its United States dollar borrowing, resulting in higher interest costs, chairman Paul B Scott has said.
  • “ASBH has significant operations in Trinidad where access to the US$ has been a challenge in the last year. This has led to increased borrowing of US$ and thus, higher interest costs, as we pay our payables,” Scott said.
  • “As we grow our business outside of Trinidad, these US liabilities will be matched by earnings in US$ or convertible currencies. We are confident that we will be able to continue and support the growth of the company and our commitment to our principals in growing their business,” he said.
  • ASBH faced challenges in accessing foreign exchange in Trinidad and Tobago, prompting the company to engage in costly hard currency swaps. CEO Richard Pandohie noted that while this has become part of the cost of doing business there, ASBH is working to mitigate its impact through increased exports and strategic acquisitions.
  • ASBH is building a state-of-the-art, US$25Mn regional distribution centre in central Trinidad, expected to be completed by February 2026. The facility will consolidate seven warehouses, improve operational efficiency, reduce lead times, and strengthen supply chain responsiveness across the Caribbean.
  • Additionally, ASBH is advancing its digital transformation strategy that incorporates automation, AI, and advanced analytics to enhance decision-making, productivity, and service delivery. This initiative is also well underway at its subsidiary Caribbean Producers Jamaica Limited (CPJ) and is expected to be completed in 2025.


(Source: Trinidad Express)

Bank of Canada to Hold Rates at 2.75% But Cut at Least Twice More This Year Published: 03 June 2025

  • The Bank of Canada will hold interest rates at 2.75% on Wednesday as policymakers await further news on an economy that grew faster than expected last quarter, with at least two more cuts likely this year, according to a majority of economists in a Reuters poll.
  • That strong consensus around the upcoming decision came after data on Friday showed the economy grew quicker than predicted last quarter, at 2.2%. The surprising growth was primarily driven by exports as U.S. companies rushed to stockpile Canadian goods before U.S. President Donald Trump's tariffs took effect.
  • Lower household spending and weak domestic demand, however, suggest a downturn is coming. Also, Trump's recent announcement that he would double tariffs on imported steel and aluminum to 50% could further worsen the outlook. Still, solid economic growth in Q1 and core inflation flirting with the upper end of the BoC's 1-3% target range will provide ample reason for the central bank to hold rates this week for a second straight meeting.
  • Prior to the release, economists were unsure about the decision. Among top Canadian banks, BMO, CIBC, and TD shifted their call to a pause from a cut, while Scotiabank stood pat on their earlier view of no change. The BoC has already cut the rate by a cumulative 225 basis points since June 2024.
  • Although there was no clear consensus on where rates would be by end-2025, nearly 75% of economists - 17 of 23 - said the BoC would cut rates at least twice more this year, including eight forecasting another two reductions, seven saying a further three cuts, and two a further four.

(Source: Reuters)

Tariff Gloom Weighs on US Manufacturing; Delivery Times Lengthening Published: 03 June 2025

  • U.S. manufacturing contracted for a third straight month in May, and suppliers took the longest time in nearly three years to deliver inputs amid tariffs, potentially signalling looming shortages of some goods.
  • Factory output dropped 0.4% last month after an upwardly revised 0.4% gain in March, the Federal Reserve said on Thursday. Economists polled by Reuters had forecast production would slip 0.2% after a previously reported 0.3% rise.
  • President Donald Trump's aggressive trade policy again dominated commentary from manufacturers in the Institute for Supply Management (ISM) survey published on Monday, and suppliers were passing on the import duties to customers. That challenges the Trump administration's narrative that China and other trade partners paid the tariffs.
  • The on-again and off-again tariffs were described by some transportation equipment manufacturers as having "wreaked havoc on suppliers' ability to react and remain profitable," while makers of computer and electronic products viewed the duties and government spending cuts as "raising hell with businesses.".
  • "The outlook for the manufacturing sector looks downbeat, particularly with the initial surge in demand from front-loading now behind us," said Matthew Martin, senior economist at Oxford Economics. "Businesses are contending with higher input costs, supply disruptions, and domestic and foreign customers are wary of committing to new orders."
  • The Institute of Supply Management (ISM) said its manufacturing Purchasing Managers’ index (PMI) edged down to a six-month low of 48.5 last month from 48.7 in April. A PMI reading below 50 indicates contraction in the manufacturing sector, which accounts for 10.2% of the economy. The PMI, however, remains above the 42.3 level that the ISM says over time indicates an expansion of the overall economy.

(Sources: Reuters)

PPI Components Show Mixed Results in April 2025 Published: 30 May 2025

  • Output prices for producers in the Mining and Quarrying industry, a component of the producers' price index (PPI), declined by 12.0% for April 2025, while another PPI component, the index for the Manufacturing industry, increased by 0.1% according to the Statistical Institute of Jamaica (STATIN).
  • The outturn for the Mining & Quarrying industry was primarily driven by a 12.5% drop in the index for the major group ‘Bauxite Mining & Alumina Processing’.
  • On the other hand, the increase in the PPI for the Manufacturing industry was largely supported by gains of 0.2% and 1.6% in the major groups ‘Food, Beverages & Tobacco’ and ‘Paper and Paper Products’, respectively. However, this was partially offset by a 0.3% decline in the index for the ‘Refined Petroleum Products’ group.
  • For April 2024 – April 2025, the point-to-point index for the Mining & Quarrying industry rose by 8.3%. This was due to a 7.6% increase in the index for the major group ‘Bauxite Mining & Alumina Processing’.
  • Meanwhile, the point-to-point index for the Manufacturing industry decreased by 0.2%, mainly due to a 15.4% decline in the index for the major group ‘Refined Petroleum Products’. However, this downward movement was tempered by a 3.9% increase in the index for the major group ‘Food, Beverages & Tobacco’.

(Source: STATIN)

SOS Q1 Earnings Dip On Costs Pressures Published: 30 May 2025

  • For the first quarter ended March 31, 2025, Stationary and Office Supplies Limited (SOS) reported a 23.0% year-over-year decrease in net profit attributable to shareholders, falling to J$73.56Mn from J$95.58Mn in Q1 2024, as rising direct and operating costs weighed on earnings.
  • Revenue for the quarter rose 2.4% year-over-year to a historic high of J$537.47 million, up from J$524.81 million in the prior year. The increase reflects SOS’s ongoing push to broaden its customer base and enhance market reach.
  • However, direct costs rose 11.9% to J$262.03 million, outpacing revenue growth and driving a 5.3% decline in gross profit to J$275.44 million. As a result, gross profit margin contracted by 4.1 percentage points to 51.2%, compared to 55.3% in Q1 2024.
  • The margin erosion was driven by the continued depreciation of the Jamaican dollar, along with SOS’s strategic choice to absorb rising input costs—including increased shipping charges and higher tariffs—without passing these on to customers.
  • Total operating expenses also deteriorated, increasing by 8.1% (+13.8Mn) mainly due to higher staff costs. Consequently, operating profit contracted by 26.9%, or J$29.12Mn during the quarter to close at $J79.08Mn. Additional pressure from finance costs further dragged down the bottom line, resulting in the 23.0% drop in net profit.
  • Looking ahead, SOS is banking on continued expansion in its SEEK manufacturing facility and the growth of its EVOLVE furniture line to support future earnings. The SEEK facility upgrade is scheduled for completion by mid-2025 and is expected to significantly increase production capacity and diversify the product range under the SEEK brand. Meanwhile, the EVOLVE line delivered 40% growth in 2024 compared to the previous year. Management believes this line still has significant growth potential and will continue to invest in its development.
  • Additionally, SOS is actively enhancing its inventory and product diversification. Management reported that its procurement team is exploring opportunities to expand the company's offerings in both stationery and furniture. This includes attending trade shows to identify new trends and negotiating with manufacturers to optimise costs and increase value.
  • SOS’s stock has declined 11.3% year-to-date, closing at J$1.49 on Tuesday. At this price, the stock trades at a price-to-earnings (P/E) ratio of 16.6x, which is lower than the Junior Market Distribution Sector’s average of 36.5x.

(Sources: SOS Financial Statements and NCB)

Foreign Exchange Boost As Central Bank Defends Fixed Exchange Rate Published: 30 May 2025

  • Barbados has reinforced its international reserves and defended the stability of its currency through a series of repatriations and foreign exchange sales, according to the latest annual report from the Central Bank of Barbados. The measures have helped maintain the country’s fixed exchange rate and provided a robust buffer against global economic shocks.
  • The country repatriated some $84Mn in foreign currency held abroad back to Barbados currency, alongside sales of the Barbados dollar last year, the report revealed. The report, which has been laid in Parliament, showed there were 17 such repatriations in 2024.
  • Pointing out that the bank continued to prioritise the protection of Barbados’ fixed exchange rate, the report said that, while this figure represents a decline of $51Mn relative to 2023, the proceeds from these sales continued to provide a boost to the country’s international reserve.
  • “Sales of United States dollars abroad totalled $33Mn in 2024, less than half the amount traded a year earlier, while sales of Great Britain’s pounds sterling fell to $8Mn in 2024, a decrease of $7Mn compared to 2023,” the central bank said. The trading of Canadian dollars, Eastern Caribbean dollars, and euros each yielded $2Mn by the end of 2024, while Barbados currency sold abroad increased by $4Mn to reach $37Mn.
  • Citing reserves management as the anchor for a strong Barbadian dollar, the financial institution insisted that maintaining a high level of international reserves is crucial for upholding the peg of two Barbadian dollars to one United States dollar.
  • “Maintaining reserves significantly above this benchmark is crucial, as it provides a substantial buffer against external shocks, such as fluctuations in international markets or economic downturns.” It contended that this excess in reserves enhances investor confidence, underpins the stability of the Barbadian dollar, and ensures that the Central Bank can meet its foreign obligations and support the import-dependent nature of the economy without strain.

(Source: Barbados Today)

Tourism Fuels Over 40% of Dominican Republic’s Economic Growth Published: 30 May 2025

  • Tourism Minister David Collado underscored the vital role of tourism in the Dominican Republic’s economy, noting that the sector accounts for over 15% of the national GDP.
  • He described tourism as the pillar of economic stability, citing revenues of more than US$10.50Bn in 2024, which helped maintain a stable exchange rate.
  • Diversification of the tourism offer has been one of the driving forces behind this growth: as well as beaches and sunshine, the Dominican Republic has developed ecotourism in Jarabacoa and Bahía de las Águilas, boosted cultural tourism in Santo Domingo, and stimulated medical tourism.
  • Collado highlighted that from 2022 to 2024, over 40% of the country’s economic growth was driven by tourism, a figure confirmed by the Central Bank governor. He added that in many countries, tourism would be regarded as the main industry, and in the Dominican Republic, it has proven to be indispensable to national development.

(Sources: Dominican Today)