• The government is working towards further reducing the duties on imported electric vehicles to support renewable energy goals. Minister of State in the Ministry of Foreign Trade and Business Development, Sandra Husbands, gave the assurance that the Barbados National Energy Policy’s goal of achieving 100% renewable energy by 2030 was still a reality.
• The objective was to improve Barbados’ energy security and resilience as well as to curb the country’s dependence on imported fuels.
• As the policy is built out, the government will implement measures to address energy consumption and efficiency within the transportation sector, conversion from fossil fuel use to electricity, transportation management, clean energy use and emissions control within the transportation sector.
• “This, in turn, will result in a sector that includes but is not limited to the operation of a greater percentage of electric vehicles and hybrid vehicles in the local fleet, utilisation of a skilled workforce to provide effective maintenance on electric vehicles, a greater number of renewable energy systems installed that can be used as charging stations for electric vehicles, carports and charging stations and the reduction of duties on the importation of electric vehicles,” Husbands said.

(Source: Barbados TODAY)

• Liz Truss said on Thursday she was resigning as British prime minister just six weeks after she was appointed. Her resignation came early as she was brought down by an economic programme that sent shockwaves through financial markets last month and divided her Conservative Party.
• Speaking outside the door of her Number 10 Downing Street office, Truss accepted that she could not deliver the promises she made when she was running for Conservative leader, having lost the faith of her party.
• A leadership election will be completed within the next week to replace Truss, who is the shortest-serving prime minister in British history. George Canning previously held the record, serving 119 days in 1827 when he died.
• Appointed on Sept. 6, Truss was forced to sack her finance minister and closest political ally, Kwasi Kwarteng, and abandon almost all her economic programme after their plans for vast unfunded tax cuts crashed the pound and British bonds. Approval ratings for her and her Conservative Party collapsed.

(Source: Reuters)

• “New steps from the Group of Seven countries to cap Russian oil sales at an enforced low price will not be replicated against OPEC producers, whose plans to cut output have irked consumer countries”, a United States Treasury official told Reuters.
• The United States has communicated to representatives of the Organization of the Petroleum Exporting Countries (OPEC) to reassure them of those limits to its plans, the official added.
• The comments could help ease a spat between the United States and Saudi Arabia, the top oil exporter and de facto OPEC leader, over what Washington sees as collaboration with Russia to deprive markets of supply just as a global recession looms.
• OPEC+, which groups the producer bloc with allies like Russia, announced last week that it would cut production by 2 million barrels per day to balance markets and quell volatility.

(Source: Reuters)

• For September 2022, the All-Jamaica Consumer Price Index (CPI) increased by 1.4%.
• However, September’s point-to-point inflation fell to 9.3%, sustaining the downward trend forecasted by BOJ for H2 2022. Notably, the figure represents the lowest point-to-point inflation figure since the beginning of 2022.
• For September, the rise in monthly inflation was largely driven by the 4.1% increase in the index for the division ‘Housing, Water, Electricity, Gas and Other Fuels’ owing to the cessation of the Government of Jamaica’s (GoJ) 20.0% subsidy on electricity bills for customers who use 200 kilowatts per hour or less
• On November 18, 2022, the BOJ will host its next monetary policy meeting at which it is anticipated that it will continue to raise rates.  However, if the inflation rate continues to decline the central bank could temper its rate hikes from the previous 50bps movements to 25bps. This would carry the policy at or above 6.75%, from the current rate of 6.50%. This decision will be driven by the sustained expectation for future breaches in the inflation range, more aggressive Fed hikes and the still elevated inflation expectations for 12 months ahead, which rose to 12.6% in the August Survey from 13.1% in the prior survey.

(Sources: STATIN and NCBCM Research)

• The unemployment rate in July 2022 was 6.6% compared to 8.5% for the corresponding period of 2021.
• While this rate is below the pre-pandemic level, it should be noted that the employed persons declined relative to April 2022 outturn when 1,269,300 persons were employed versus 1,268,000 persons as of July 2022.
• The number of employed males increased by 11,000 (1.6%) to 688,500 year-over-year, while the number of employed females increased by 42,000 (7.8%) to 579,500, accounting for 79.2% of the increase in the employed labour force.
• The unemployment rate is expected to remain at low levels going forward due to the full reopening of the economy, increased demand for workers, especially in service sectors, as well as higher employment opportunities in the BPO and tourism sectors. The global services sector (GSS)/BPO sector grew during the pandemic and at present, Jamaica has over 60 BPO companies with over 54,000 people employed up from about 36,000 persons in 2019. The government plans to improve economic diversification and resilience through growth in this sector which bodes well for the unemployment rate.

(Sources: STATIN and NCBCM Research)

• “Considering the peculiar and special needs of Small-Island Developing states (SIDs) and low-lying coastal states, there needs to be more climate adaptation financing on soft terms, meaning more grants, concessionary interest rates, and long-term repayment periods”, President, Dr Irfaan Ali has said.
• He noted that “these challenges relate to their smallness of land resources and the resultant diseconomies of scale, their remoteness from larger markets, susceptibility to external shocks and market vulnerabilities, narrow revenue bases, fragile ecosystems, and their vulnerability to climate risks.”
• Owing to those threats and challenges, critical resources needed to support production often have to be diverted towards climate adaptation. Adaptation, according to the United Nations Framework Convention on Climate Change (UNFCCC), refers to adjustments in ecological, social, or economic systems in response to actual or expected climatic stimuli and their effects or impacts.
• Climate adaptation financing is essential and foundational for establishing climate-resilient agricultural sectors in small-island developing and low-lying coastal states, without it the agricultural sectors of SIDs and low-lying coastal states will be continuously prone to climate risks.

(Source: Guyana Chronicles)

• The European Commission proposed another set of emergency measures on Tuesday to tackle high energy prices but steered clear of an immediate cap on gas prices as EU countries remain split over the idea.
• The proposals, which need approval from European Union member states, are the bloc's latest effort to address the spike in energy prices and fuel supply crunch that have gripped Europe after Russia cut gas flows since invading Ukraine.
• The measures did not include an immediate gas price cap, which most EU countries say they want. But the Commission asked for EU countries' approval to draft a proposal to set a temporary "maximum dynamic price" on gas trades at the Title Transfer Facility (TTF) Dutch gas hub, which serves as a benchmark price for European gas trading.
• The Commission said the price limit would need to meet conditions, including that it would not cause Europe's gas demand to increase.

(Source: Reuters)

• New British finance minister Jeremy Hunt on Monday announced almost a complete U-turn on Prime Minister Liz Truss’ plan to boost economic growth through unfunded tax cuts, which had sent international investors bolting for the exit.
• Here are some of the policy reversals announced by Hunt, which he said would raise 32 billion pounds ($36.19 billion) for the government finances:
• INCOME TAX: Hunt announced this will stay at 20% indefinitely from the previous 19% announced. The finance ministry said this will raise around 6 billion pounds a year.
• ENERGY BILLS SUPPORT: Hunt said the government's support for household and business energy bills will only run to April next year, with a review to consider what support will be needed after that point and how it can be better targeted.
• OFF-PAYROLL WORKING REFORMS: the government is looking to cut the cost of its growth plan by around 2 billion pounds per year.
• CORPORATION TAX: Britain will now press ahead with its original plan to raise its 19% corporation tax rate - the lowest among the G7 club of rich nations - to 25% in 2023.
• DIVIDENDS TAX: Hunt reversed the plan to cut the rate of tax on dividends by 1.25 percentage points from next year, which had been valued at around 1 billion pounds a year.

(Source: Reuters)

• Kremi reported a net profit of $8.52Mn for its six months ending August 31, 2022, which represents a $52.91Mn (or 86.2%) decrease relative to the prior period. This decline in profitability was mainly attributed to higher direct and operating costs.
• Despite a 21.5% or $222.46Mn increase in revenues owing to an increase in volumes sold and prices, its direct costs increased more rapidly (34.1% or $229.87Mn) putting downward pressure on the gross profit. Large increases in raw materials were a primary contributor to the rise in direct expenses and increase in product price adjustments.
• Additionally, a 13.6% increase in operating expenses also constrained profitability.  This increase was attributed to higher costs of utilities, security, cleaning, sanitation, and transportation. Also of note, the company’s loan financing cost increased leading to a 133.4% increase in its net financial costs.
• Due to the uncertainty, and still elevated price level for raw materials and utilities, Kremi could continue to see an erosion in its bottom line for the remainder of its financial year. 
• Kremi’s stock price has decreased by 23.4% since the start of the calendar year. The stock closed Friday’s trading session at $4.06.

(Sources: Company Financials and NCBCM Research)

• Mexico's biggest non-bank lenders may need to become licensed banks, analysts said, as they manoeuvre through growing market turmoil to avoid the fate of three big peers who defaulted in the past year.
• During the pandemic, non-bank institutions grew to represent 20% of Mexico's private credit market. Also known as "shadow banks," they offer everything from unsecured credit to payroll lending to Mexico's 4-to-5 million small and medium-sized businesses.
• However, three major publicly traded players have since defaulted in a year: AlphaCredit, Credito Real and Unifin. Now banks are less willing to finance non-bank lenders. International bondholders are also reluctant after losing billions of dollars in the recent wave of defaults.
• With confidence in the sector dried up, along with an ensuing liquidity drop and rising interest rates, the remaining players face much slower growth prospects and potentially a fight to survive.
• There is one other option available to such lenders in Mexico - become a bank, likely via an acquisition. That would allow them to lend out customer deposits rather than relying on credit markets, analysts said. Gilberto Garcia, an analyst at Barclays in Mexico, agreed that nonbank lenders would struggle to grow in the current funding climate, making becoming a bank a more attractive avenue.
• Mexican fintech Covalto, previously named Credijusto, successfully went this route last year, acquiring a bank. "We specifically became a bank to prevent the pitfalls of this moment. The stability and security that we have right now, and the long-term benefit of decreasing our cost of capital, that's what we bought," said Covalto co-CEO David Poritz.
• The bank route does not resonate with everyone. Some nonbank lenders hope to stick with the existing business model, which emerged to tackle the country's reported $160 billion funding gap.

(Source: Reuters)