• Russian gas flows via the Nord Stream 1 pipeline are seen restarting on time on July 21, 2022, after the completion of scheduled maintenance, two sources familiar with the export plans told Reuters.
• The pipeline, which accounts for more than a third of Russian natural gas exports to the European Union, was halted for ten days of annual maintenance on July 11.
• The sources, speaking on condition of anonymity because of the sensitivity of the issue, told Reuters the pipeline was expected to resume operation on time, but at less than its capacity of some 160 million cubic meters (mcm) per day.
• Nord Stream 1, which runs on the bed of the Baltic Sea to Germany, has been in focus since Russia sent troops to Ukraine on Feb. 24 in what Moscow describes as a "special military operation".
• The West has accused Russia, the world's largest gas exporter and second-largest crude oil supplier, of using its energy supplies as a tool of coercion. However, Russia has refuted the accusations, saying it has been a reliable energy supplier.

(Source: Reuters)

• For the month of June, the All-Jamaica Consumer Price Index (CPI) increased by 0.8%. June’s outturn means the monthly CPI has increased further relative to the 0.3% increase witnessed in May. The point-to-point inflation was however stable at 10.9% in the 12 months to June 2022, relative to the May 2022 outturn. This keeps inflation outside the BOJ’s target range of 4% to 6% for the 11th consecutive month.
• For June, this upward movement was impacted primarily by a 1.7% increase in the index for the heaviest weighted division ‘Food and Non-Alcoholic Beverages’ and a 0.9% upward movement in the index for the ‘Transport’ division. The overall movement of the CPI was tempered by the 0.5% decline in the index for the division ‘Housing, Water, Electricity, Gas, Other Fuels’. The decline in the index was influenced by the assistance provided by the government to low and middle income households with 20% of their bill payments.
• The point-to-point inflation rate was mainly influenced by divisions: ‘Food and Non-Alcoholic Beverages’ (13.7%), ‘Transport’ (15.6%) and ‘Restaurants and Accommodation Services’ (22.4%). For the fiscal year-to-date (April 2022- June 2022), the inflation rate was 1.1%.
• The current breach in the inflation range is in keeping with expectations, as the BOJ noted in June 2022, that inflation was projected to successively breach the target over the next two years. Further, while it had projected in May that the rate would likely peak within the range of 12.0% and 15.0% by June 2022, in June it revised its outlook to note that it was possible that inflation would fall below the peak range, which it has.
• While the rate will remain elevated in the short term, it is anticipated that it will decline in the second half of the year as global food prices have been falling as reported by the FAO, and other commodity prices such as oil are expected to fall.
• On August 18^th, 2022, the BOJ will have its next monetary policy meeting at which further policy rate increases will be discussed. The policy rate currently stands at 5.5%, which was made effective on 30 June 2022. Given that the BOJ has noted that the interest rate is closer to the level that it deems appropriate, there may be smaller and less hikes in the future.

(Sources: STATIN & NCBCM Research

• Jamaica’s unemployment rate remained on a downward trajectory, falling to a new record low of 6.0% in April 2022. The rate was 3.0 percentage points lower than the rate on record at the end of the same quarter last year. The male unemployment rate decreased by 2.8 percentage points from 7.5% to 4.7%, while the female unemployment rate declined by 3.3 percentage points from 10.8% to 7.6%.
• In April 2022, there were 1,269,300 employed persons, an increase of 63,300 (5.2%) over April 2021. Females accounted for just over one-half of the increase in employment (33,600 or 53.1%). Female employment increased mainly in the occupation groups ‘Service Workers and Shop and Market Sales Workers’ and ‘Clerks’ while the increase in male employment was primarily in ‘Craft and Related Trades Workers’ and ‘Elementary Occupations’
• The largest increase in employment by occupation group was in ‘Service Workers and Shop and Market Sales Workers’. There were 283,900 persons employed in this group in April 2022, an increase of 18,500 persons (7.0%).
• The largest increase in the employed labour force by industry group was in ‘Real Estate and Other Business Services’. In April 2022, there were 126,300 people employed, 21,300 (20.3%) more persons than at the end of the comparable quarter of the previous year.
• The record low unemployment rate is a lagging economic indicator that likely supported the GDP growth seen in the first quarter of 2022. The economy grew by 6.4% during the quarter when compared to the first quarter of 2021.

(Source: STATIN)

• Guyana is expected to improve the efficiency and effectiveness of its public policy and fiscal management response to the COVID-19 pandemic, with a US$130Mn loan from the Inter-American Development Bank (IDB).
• The money comes as the second of a two programmatic-based loan series that will support Guyana’s government efforts to promote macroeconomic stability and withdraw emergency tax measures as part of a strategy to adapt its public policy and fiscal response to the new phase of the COVID-19 pandemic.
• According to the IDB the new phase of financing will also support measures to increase the efficiency and transparency of government procurement processes, as well as measures to promote greater fiscal sustainability, address climate change and accelerate economic recovery with greater gender equality.
• These include the approval of a medium-term fiscal framework, the implementation of recovery measures included in the Guyana COVID-19 National Action Plan, and the approval of a new institutional framework for public investment management, among other measures.

(Source: Kaieteur News)

• Grenada is hoping to find commercial oil and gas resources that can be used to develop the island. If successful, the country’s recently elected Prime Minister Dickon Mitchell believes that Grenada can learn from the rapid development of Guyana’s oil and gas industry.
• Prime Minister Mitchell, said there are several key priorities his government is pursuing. Among those is the development of the country’s oil and gas industry, since there were some promising finds in the past.
• Grenada is already partnering with Trinidad and Tobago (T&T) to allow the Twin-Island Republic to search for hydrocarbon resources in their shared maritime space. With Grenada eyeing oil and gas development, the country could become part of a regional energy strategy.

(Source: Newsroom)

• Confidence among builders in the nation’s single-family housing market fell in July to the lowest level since the start of the pandemic. The National Association of Home Builders/Wells Fargo Housing Market Index, a survey designed to gauge market conditions, found builder sentiment dropped 12 points to 55. That marked the largest single-month drop in the survey’s 37-year history with the exception of April 2020, when the reading plummeted 42 points to 30 after the start of the Covid-19 pandemic.
• Any rating above 50 on the index is still considered positive, but sentiment has now fallen 24 points since March when mortgage rates began moving higher. The average rate on the 30-year fixed mortgage has nearly doubled since January and is now hovering just below 6%.
• Sentiment stood at 80 in July of last year after hitting a record high of 90 in November 2020, when the pandemic sparked a rash of home buying among people looking for more space in less urban areas. Now, concerns about inflation and recession are among the factors taking a toll on builder sentiment.
• Of the index’s three components, builder sentiment about current sales conditions dropped 12 points to 64, while sales expectations for the next six months fell 11 points to 50, and sentiment about buyer traffic declined 11 points to 37. That last component is now solidly in negative territory.
• In another sign of a softening market, 13% of builders in the HMI survey reported reducing home prices in the past month to bolster sales or limit cancellations, according to Jerry Konter, NAHB chairman and a homebuilder in Savannah, Georgia.

(Source: CNBC News)

• Germany may extend the life of its three remaining nuclear power plants, the economy ministry said on July 18, 2022, as public support rises in the face of a possible cut-off of Russian gas.
• Germany's remaining nuclear plants are scheduled to be shut down by year-end after former Chancellor Angela Merkel pledged to phase out nuclear power following the meltdown at the Fukushima nuclear plant in Japan in 2011. The three plants made up 6% of Germany's power production in the first quarter of 2022.
• A first assessment by the environment and economy ministries in March did not recommend extending the plants' lifetime, citing legal, licensing, and insurance challenges, the need for extensive and possibly costly safety checks, and a lack of fuel rods to keep the plants running.
• But falling Russian gas supplies to Germany through the Nord Stream 1 pipeline have emboldened pro-nuclear voices in Germany and Europe ahead of a feared electricity crunch this winter. The ministry said power grid operators had requested a second assessment of the viability of nuclear power.
• The new assessment will consider the potential impact of higher gas prices on electricity prices, more serious gas supply outages, and a halt in French nuclear power plant production, an economy ministry document seen by Reuters showed.
• The stress test will also consider the special situation in southern Germany and in the state of Bavaria, where Isar II nuclear power plant is due to be shut at the end of the year. The state depends on gas-fired power plants and has few coal-fired plants and low wind power production, it added. Bavaria's Economy Minister Hubert Aiwanger on July 17 urged the federal government to extend the lifetime of the nuclear power plants

(Source: Reuters)

• Jamaica is projected to earn more than US$5Bn in direct foreign exchange inflows from visitor occupancy of approximately 8,000 rooms slated for construction over the next two to five years.
• Tourism Minister, Hon. Edmund Bartlett, says over 24,000 new jobs are also expected to be generated by the developments, valued approximately US$2Bn, which are either underway or slated to commence shortly.
• “It will be the largest expansion of tourism in the history of the industry [in Jamaica],” Mr. Bartlett further indicated, during a recent media briefing at Gordon House, in downtown Kingston.
• The programmed activities include the 2,000-room Princess Hotel in Hanover from which the first 1,000 rooms will be ready by 2023, the 260-room Sandals Dunn’s River development in Ocho Rios, St. Ann and the new 700-room RIU Hotel being constructed in Falmouth, Trelawny.
• There are also a number of smaller projects being completed by smaller hotels and villas that are locally owned. Mr. Bartlett highlighted that the villa subsector “is growing leaps and bounds.”
• These developments are helping to change the clientele demographic visiting Jamaica, attract more families, and offer a lot more engagement with communities. This is expected to further boost Jamaica’s tourism product and the sector’s contribution to growth and employment.

(Source: JIS News)

• Minister of Foreign Affairs and Foreign Trade, Senator the Hon. Kamina Johnson Smith, says there is urgent need for disaster risk financing solutions for countries across the Caribbean.
• The Senator, who was speaking on the topic: ‘Financing for Development: Catastrophe Bonds,’ highlighted the region’s vulnerability to disasters, noting that over the last decade, the Caribbean has had only one year with less than 10 named storms.
• In 2020, a historic high of 30 named storms were recorded, while 21 were documented in 2021, which was the third highest. An above normal hurricane season is forecasted for 2022.
• So far, Jamaica has successfully collaborated with international partners to implement long-term strategies to prepare for and respond to disasters, and there is need for more partnerships among Caribbean states and development institutions.
• A World Bank release, last year, said that the International Bank for Reconstruction and Development (IBRD), the lending arm of the World Bank, announced a catastrophe bond that provides financial protection to the Jamaican government against losses from named storms.
• The commitment values US$185 million and covers three Atlantic tropical cyclone seasons. It will end in December 2023.
• Disaster risk reduction is integral in achieving the Sustainable Development Goals (SDGs), which were adopted by the United Nations in 2015. The SDGs provide a blueprint to achieve a better and more sustainable future for all.

(Source: JIS News)

• Senior Finance Minister Dr. Ashni Singh on Wednesday announced that the government has made its second withdrawal from the Natural Resource Fund in accordance with the Natural Resource Fund (NRF) Act 2021.
• According to a press release from the Finance Ministry, US$200 million equivalent to G$41.6 billion has been transferred from the Natural Resource Fund to the Consolidated Fund to finance national development priorities. This brings the accumulated withdrawals to date from the NRF to US$400 million, equivalent to G$83.3 billion, as the government made its first withdrawal last year May.
• The NRF Act 2021 came into operation on 1st January 2022, and as part of the Budget 2022 process, Parliamentary approval was granted for a total of US$607.6 million to be transferred during the fiscal year 2022.
• The IMF commended the government on the amendments made to the NRF Act noting “The recent amendments to the 2019 Natural Resource Fund Act set clear ceilings on withdrawals from the fund for budgetary spending and promote transparency in the management and use of oil resources.”

(Source: Newsroom)