• For much of the global economy, 2023 is going to be a tough year as the main engines of global growth - the United States, Europe and China - all experience weakening activity, the head of the International Monetary Fund, Kristalina Georgieva, said on Sunday, Jan. 1, 2023.
• In October, the IMF cut its outlook for global economic growth in 2023, reflecting the continuing drag from the war in Ukraine, inflation pressures, and the high-interest rates engineered by central banks like the U.S. Federal Reserve to bring those price pressures to heel.
• Georgieva said the U.S. economy is standing apart and may avoid the outright contraction that is likely to afflict as much as a third of the world's economies.
• Inflation showed signs of having passed its peak as 2022 ended, but by the Fed's preferred measure, it remains nearly three times its 2% target. Last year, in the most aggressive policy tightening since the early 1980s, the Fed lifted its benchmark policy rate from near zero in March to the current range of 4.25% to 4.50%, and Fed officials last month projected it will breach the 5% mark in 2023, a level not seen since 2007.
• The U.S. job market will be a central focus for Fed officials who would like to see demand for labour slacken to help undercut price pressures. The first week of the new year brings a raft of key data on the employment front, including Friday's monthly nonfarm payrolls report, which is expected to show the U.S. economy minted another 200,000 jobs in December and the jobless rate remained at 3.7% - near the lowest since the 1960s.

(Source: Reuters)

• Mainland China’s reopening came sooner than expected for investors, and Goldman Sachs warns it will lead to short-term strains in the workforce and supply chains.
• According to mobility data analyzed by economists at Goldman Sachs, China is likely to see “weaker growth momentum during the frontloaded ‘exit wave’ on the back of surging infections, a temporary labour shortage, and increased supply chain disruptions,” it said in a note Tuesday.
• According to economists polled by Reuters, China’s factory activity is expected to have contracted in December when its National Bureau of Statistics releases its manufacturing Purchasing Managers’ Index on Saturday, Jan. 7. Economists predict the reading will come in at 48, below the 50-point mark that separates growth from contraction and in line with levels seen in the previous month. 
• Despite shorter-term concerns for China’s reopening, economists have a rosy outlook for China’s growth in the long run.
• The economists noted that the latest developments for reopening support the firm’s previous forecasts for China’s economy to grow 5.2% in 2023, after expanding 1.7% in the fourth quarter of 2022 on an annualized basis. The latest outlook was revised in mid-December when it raised its forecast for 2023′s full-year growth from a previous prediction of 4.5%.

(Source: CNBC)

• The board of the movie theatre Palace Amusement has agreed to a stock split. The decision will now be put to the company's shareholders at its annual general meeting on January 24, 2023.
• Investors will be asked to vote on increasing the company's authorised share capital from 1.5 million to an unlimited number of shares.
• These ordinary shares will be equal to the current shares in circulation. Palace's shareholders are also asked to agree to a stock split, which would see each issued ordinary share in the company sub-divided into 600 additional shares. This would take effect from the close of business on February 28, 2023.
• It will bring the total number of issued shares from 1.44 million ordinary shares to 862.22 million ordinary shares with no-par value.

(Source: RJR News)

• The Grenada Tourism Authority announced that for the third consecutive month commencing in September, visitor arrivals showed a significant increase over the benchmark year of 2019. Data suggested that November 2022 saw the highest arrivals, with a total of 14,232 visitors, representing a 17% increase over 2019 figures.
• Notably, the USA market has shown the strongest rebound and represents 61% of overall visitation. The market is anticipated to finish 2022 with a 2% growth over 2019 which, given the fact that Grenada opened its ports only in April of this year, shows how strong the recovery has been.
• CEO of the Grenada Tourism Authority Petra Roach stated, “During the pandemic, we did a lot of groundwork putting systems in place to create a more efficient operation and evaluate our activity.” Since then, the country’s digital footprint has expanded significantly, which has given the country a much more cost-effective marketing reach.

(Source: Now Grenada)

• British Prime Minister Rishi Sunak is poised to halve financial support on energy bills for businesses, amid concerns about the cost, The Times reported.
• Former Prime Minister Liz Truss had announced in September a six-month scheme to subsidise the wholesale price for businesses. UK Chancellor Jeremy Hunt "will announce a 12-month extension to the scheme but with the level of support more than halved, amid concerns about taxpayers' exposure to fluctuating energy prices.
• The report comes after British public borrowing during last month hit its highest (£22bn versus £13.9Bn in November 2021) for any November on record, reflecting the mounting cost of energy subsidies, debt interest and the reversal of an increase in payroll taxes.
• The new scheme is expected to cost less than £20Bn ($24.09Bn) over 12 months, compared with £40Bn for the existing one, the report added.
• The businesses would get a discount of up to £345/megawatt hour of electricity and £91/megawatt hour of gas.

(Source: Reuters)

• Bank lending to euro zone companies slowed in November, easing back from the sector's biggest borrowing binge in over a decade as rising interest rates and a looming recession appear to be taking a toll, European Central Bank data showed on Thursday.
• Lending to businesses in the 19-country euro area expanded by 8.4% in November after an 8.9% reading a month earlier, while household credit growth slowed to 4.1% from 4.2%.
• The monthly flow of loans to companies was also sharply lower at minus 1 billion euros after a 24 billion euro reading a month earlier.
• Growth in the M3 measure of money circulating in the eurozone slowed to 4.8% from 5.1%, coming below expectations for 5.0% in a Reuters survey.

(Source: Reuters

• Jamaica is looking to forge closer ties with Cuba for the further development of the local agriculture sector. Minister of Agriculture and Fisheries, Hon. Pearnel Charles Jr said there is potential for the countries to join efforts in research and development for pest and weed management and alternatives for animal feed and fertilisers.
• “These are areas of focus because they directly impact our capacity for increased and improved production and will be a focus as we, in Jamaica, drive our ‘Grow Smart, Eat Smart’ strategy, which we welcome Cuba to join,” he said. “Another important area of continued collaboration that can be better refined is engagement as it relates to the expertise for the repair of equipment used in farming operations,” Minister Charles Jr. added.
• Minister Charles Jr. reiterated the Government’s commitment to exploring all viable options to advance agriculture and ultimately, achieve food security.
• Jamaica and Cuba have enjoyed friendly relations over the last 50 years, with thousands of students benefiting from tertiary education, including specialised training in the field of agriculture.
• The Ministry continues to prioritise its ‘Grow Smart, Eat Smart’ strategy, which aims to expand the sector’s growth and sustainability, achieve food security and reduce the food import bill.

(Source: JIS News)

• Fitch expects that lower gas prices will cause Trinidad & Tobago’s (T&T) current account surplus to narrow from 13.3% of GDP in 2022 to 10.9% of GDP in 2023. This change will be mostly due to the narrowing trade surplus, which is expected to shrink from 18.8% of GDP to 17.0% of GDP.
• The trade surplus will continue to narrow over the longer term, though the overall current account balance will remain in surplus throughout the forecast period. The 2022 surplus was boosted by elevated energy exports, which were even higher than expected. Notably, Fitch revised its 2022 current account forecast from a surplus of 6.3% of GDP to 13.3% of GDP after goods exports rose 159.0% y-o-y in Q1 2022.
• On the other hand, exports are forecast to fall. Fitch expects that goods imports will be essentially flat in 2023, (+1.0%). The rising cost of imported food and refined fuels caused T&T’s import bill to rise by 29.8% in 2022. In 2023, however, softer commodity prices will reduce this pressure. Commodity prices will slip but remain strong, and it is also expected that private consumption will stay strong and keep imports sticky.
• The services trade deficit will widen from 4.3% of GDP in 2022 to 6.0% in 2023, as slowing global growth cuts demand for international travel. The lifting of pandemic-related lockdowns and travel restrictions caused the transport and tourism sectors to recover, narrowing the service trade deficit in 2022.
• T&T’s wide current account surplus allowed the country to accumulate foreign exchange reserves in 2022, and this is expected to continue in 2023. T&T’s reserves are anticipated to remain well above 8.0 months of import cover through 2023, due to consecutive future current account surpluses, underpinning continued external account stability.
• Risks to the forecast remain slightly to the downside. Energy prices are expected to stay well above pre-COVID levels. However, if energy prices fall below Fitch’s current expectations next year, the current account surplus will be much narrower than currently anticipated.

(Source: Fitch Solutions)

• The Central Bank of the Dominican Republic reported that the monthly indicator of economic activity (IMAE) registered an accumulated growth of 5.0% in January- November 2022 when compared to the same period the previous year, after incorporating the interannual variations of 3.8% in October and 2.9% in November of the current year.
• The Dominican economy’s trend throughout the year reflects a moderation in its growth rate in recent months, as increases of 6.1%, 5.1%, and 5.0% were recorded in the first three quarters of the year, respectively.
• The slowdown in domestic demand, primarily from the investment component, is due to high raw material and construction material costs, as well as the operation of the monetary policy transmission mechanism aimed at reducing inflationary pressures.
• In this regard, the results of the Central Bank forecast system indicate that actual gross domestic product (GDP) growth will be around 5.0% by the end of 2022. In terms of nominal GDP, it is expected to reach approximately US$113Bn, contributing to the consolidated public sector debt falling below 60% of GDP by the end of the current fiscal year.

(Source: Caribbean News Now)

• Contracts to buy U.S. previously owned homes fell far more than expected in November, diving for a sixth straight month in the latest indication of the hefty toll the Federal Reserve's interest rate hikes are taking on the housing market as the central bank seeks to curb inflation.
• This month, the Fed raised rates again by half a percentage point, capping a year that saw its benchmark rate shoot from near zero in March to between 4.25% and 4.5%.
• The National Association of Realtors (NAR) said on Wednesday, Dec. 28, its Pending Home Sales Index, based on signed contracts, fell 4% to 73.9 last month from October's downwardly revised 77.0. November's was the lowest reading - aside from the short-lived drop in the early months of the pandemic - since NAR launched the index in 2001.
• The housing market has suffered the most visible effects of aggressive Fed interest rate hikes that are aimed at curbing high inflation by undercutting demand in the economy. By the Fed's preferred measure, inflation is still running nearly three times its 2% goal, having risen earlier in 2022 at its fastest pace in 40 years.
• Unlike other parts of the economy - many of which have yet to show a significant impact from the Fed's actions - the housing market has reacted in near real-time to the jump in borrowing costs engineered by the central bank.

(Source: Reuters)