• Fitch Solutions forecasts that Chilean loan growth will slow to 6.8% y-o-y in 2022, as mounting headwinds cap activity across the banking sector. 
• Loan growth surprised to the upside at end-2021, coming in at 11.3% y-o-y, even as the Banco Central de Chile raised interest rates from 0.5% in June 2021 to 4.50% by December 2021.
• Loan growth has remained strong thus far in 2022, averaging 12.8% in the year through May, largely attributed to base effects as generous fiscal stimulus and loose monetary policy in early 2021 supported disposable incomes and resulted in weaker loan demand.
• Rising borrowing costs and slowing growth will dampen consumer lending, while political uncertainty will limit corporate lending as the future of Chile’s business environment remains unclear in the coming months.
• Despite slowing growth, Chile’s banking sector remains well protected from external shocks due to the historically conservative lending practices of banks, which will limit the rise of non-performing loans.

(Source: Fitch Solutions)

• Long lines are back at food banks around the U.S. as working Americans overwhelmed by inflation turn to handouts to help feed their families. With gas prices soaring along with grocery costs, many people are seeking charitable food for the first time, and more are arriving on foot.
• Inflation in the U.S. is at a 40-year high and gas prices have been surging since April 2020, with the average cost nationwide briefly hitting $5 a gallon in June. Rapidly rising rents and an end to federal COVID-19 relief have also taken a financial toll.
• The food banks, which had started to see some relief as people returned to work after pandemic shutdowns, are struggling to meet the latest need even as federal programs provide less food to distribute, grocery store donations wane and cash gifts don’t go nearly as far.
• The same scene is repeated across the nation, where food bank workers predict a rough summer keeping ahead of demand. The surge in food prices comes after state governments ended COVID-19 disaster declarations that temporarily allowed increased benefits under SNAP, the federal food stamp program covering some 40 million Americans.
• “It does not look like it’s going to get better overnight,” said Katie Fitzgerald, president, and chief operating officer for the national food bank network Feeding America. “Demand is really making the supply challenges complex.”
• Charitable food distribution has remained far above amounts given away before the coronavirus pandemic, even though demand tapered off somewhat late last year.

(Source: AP News )

• Long lines are back at food banks around the U.S. as working Americans overwhelmed by inflation turn to handouts to help feed their families. With gas prices soaring along with grocery costs, many people are seeking charitable food for the first time, and more are arriving on foot.
• Inflation in the U.S. is at a 40-year high and gas prices have been surging since April 2020, with the average cost nationwide briefly hitting $5 a gallon in June. Rapidly rising rents and an end to federal COVID-19 relief have also taken a financial toll.
• The food banks, which had started to see some relief as people returned to work after pandemic shutdowns, are struggling to meet the latest need even as federal programs provide less food to distribute, grocery store donations wane and cash gifts don’t go nearly as far.
• The same scene is repeated across the nation, where food bank workers predict a rough summer keeping ahead of demand. The surge in food prices comes after state governments ended COVID-19 disaster declarations that temporarily allowed increased benefits under SNAP, the federal food stamp program covering some 40 million Americans.
• “It does not look like it’s going to get better overnight,” said Katie Fitzgerald, president, and chief operating officer for the national food bank network Feeding America. “Demand is really making the supply challenges complex.”
• Charitable food distribution has remained far above amounts given away before the coronavirus pandemic, even though demand tapered off somewhat late last year.

(Source: AP News )

• Oil was up 2.5% on Friday after a U.S. official told Reuters that an immediate Saudi oil output boost was not expected, and as investors question whether OPEC has the room to significantly ramp up crude production.
• The comment during U.S. President Joe Biden's Middle East visit comes at a time when spare capacity at members of the Organization of the Petroleum Exporting Countries (OPEC) is running low.
• Brent crude futures were up $2.40, or 2.4%, to $101.50 a barrel by 12:57 p.m. EDT, while West Texas Intermediate crude rose $2.41, or 2.5%, to $98.19.
• Both benchmarks are on track for their biggest weekly percentage drops in about a month, largely on fears earlier in the week that a nearing recession would chop away at demand. Brent moved towards its third weekly drop, while WTI headed for its second weekly decline.
• S. President Joe Biden will on (Friday) July 15, 2022, fly to Saudi Arabia, where he will attend a summit of Gulf allies and call for them to pump more oil. However, spare capacity at the Organization of the Petroleum Exporting Countries is running low, with most of the producers pumping at maximum capacity, and it is unclear how much extra Saudi Arabia can bring into the market quickly.

(Source: Reuters)

• The Government’s Electric Vehicle (EV) Trial programme, now underway, will assist in converting many state-owned fleets to EVs. The Government will continue to transform the public transportation sector by using more renewable energy and electric vehicles (EVs).
• EVs demonstrate a positive change in public awareness of the climate crisis, which is exacerbated by the use of fossil fuels by motor vehicles worldwide.
• Prime Minister Holness lauded the trial programme as one which will “give policymakers a first-hand understanding of what it means to drive and use an electric vehicle.” He further pointed out that the programme will assist in the government’s data gathering, while it builds out an “ecosystem around electric vehicles.”
• This announcement comes as the Electric Mobility Policy for the public transportation sector has been completed. With a government policy to incentivize the importation of EVs now approved by Cabinet, we expect an increase in the number of consumers who will be able to afford these vehicles.
• This is expected to contribute to a reduction in Jamaica’s carbon dioxide emissions and assist with the government’s mandate to have 50% renewable energy by 2030. It is also anticipated to help residents cushion the impact of the high fuel prices being experienced as a result of geopolitical tensions.

(Source: JIS News)

• The ground is scheduled to be broken on Saturday (July 16) for the construction of the long-awaited Montego Bay Perimeter Road.
• Thousands of road users will benefit from the project, which will entail the construction of a 14.9-km bypass of the city to ease traffic congestion affecting the area, rehabilitation of Barnett Street and West Green Avenue, and construction of the Long Hill Bypass, as well as a drainage study.
• A US$274.5Mn contract was signed between the Ministry of Economic Growth and Job Creation and China Harbour Engineering Company Limited (CHEC) last November, for the undertaking.
• The road will allow persons to go through without jamming up the town and is expected to assist persons in getting to and from the airport within a shorter time frame. Montego Bay is Jamaica’s main resort town and is home to the island’s largest and busiest international airport, with roughly 4,200 passengers arriving and departing per hour.
• The project is expected to benefit the tourism sector through the increased ease of access from the Montego Bay airport to various tourist attractions. Construction of the perimeter road is also anticipated to increase productivity, as Jamaicans living and working in the area will spend less time in traffic.

(Source: JIS News)

• Steel demand in Latin America could dip through 2022 as the industry faces regional inflationary pressures, price hikes from the Russian invasion of Ukraine and political instability.
• The regional steel sector rebounded in 2021 following coronavirus-related restrictions in 2020, topping previous production levels, according to the report from the Latin American Steel Association (Alacero).
• However, with the attack on Ukraine causing energy prices to skyrocket, as well as inflationary strains and unpredictable election cycles in Latin America, the largest steel-using industries, like construction and auto production, have shrunk so far in 2022. Further, demand is expected to fall 2% (y-o-y) in 2022 from a y-o-y growth of 26.6% in 2021 owing to a confluence of negative factors.
• The construction sector in Latin America contracted 3% in the first quarter, while the automotive sector fell 1.2% year-over-year from February to April. In Mexico alone, the construction sector contracted 0.2% year-over-year in May, while its mining sector shrank 1.7%, according to the country's statistics agency. However, demand could recover by 2023, growing some 4% from this year.
• Infrastructure projects like the Vaca Muerta pipeline could give Latin America, and the steel industry, a much-needed boost. "This puts us in a privileged position, and we have great steel companies and engineering with the capacity to carry out the titanic task of building pipelines, creating direct and indirect jobs,” Wagner said.

(Source: Reuters)

• The risk of a euro-area recession is growing as the likelihood of natural gas shortages rises and inflation remains at record levels, according to economists polled by Bloomberg.
• The probability of an economic contraction has increased to 45% from 30% in the previous survey and 20% before Russia invaded Ukraine. Germany, one of the most vulnerable members of the currency bloc to cutbacks in Russian energy flows, is more likely than not to see economic output shrink.
• “We assume a recession based on the already implemented oil embargo and the effect of higher input prices on industry,” said Erik-Jan van Harn, a strategist at Rabobank. “The German economy is already slowing down and the trend is clearly downward.”
• The rising cost of living is taking an increasing toll on businesses and consumers who’re emerging from two years of the pandemic. Lower shipments of gas from Russia, meanwhile, pose a threat to winter energy deliveries.
• Inflation forecasts were raised from the previous poll, though price growth is still expected to slow to the European Central Bank’s 2% target in 2024. Respondents continue to see it peaking in the current quarter.
• The ECB is expected to raise its deposit rate to 0.75% by year-end and to 1.25% at its March meeting. It was previously seen reaching that level only in June.  The euro zone “is likely to enter a mild recession in the second half of this year, but this won’t be enough of a drag on demand to return inflation to target, leaving the ECB on a path of gradual rate hikes,” economists led by James Rossiter at TD Securities said.

(Source: Bloomberg News)

• China's exports rose at the fastest pace in five months in June as factories revved up after the lifting of COVID lockdowns, but a sharp slowdown in imports, fresh virus flare-ups, and a darkening global outlook pointed to a bumpy road ahead for the economy.
• The rebound in exports reflected an easing of supply chain disruptions and port congestion that hammered the world's second-largest economy in spring when the government rolled out widespread lockdowns.
• Outbound shipments in June rose 17.9% from a year earlier, the fastest growth since January, official customs data showed on Wednesday, compared with a 16.9% gain in May and much more than analysts' expectations for a 12.0% rise. "This jump reflects the easing of supply chain disruptions coming out of lockdowns and, most importantly, fewer bottlenecks at ports," said Julian Evans-Pritchard, senior China economist at Capital Economics.
• However, economists say the strength in exports is likely to fade as rising global interest rates to rein in inflation begin to sap demand and broader economic growth. The threat of further pandemic restrictions at home also hangs over Chinese businesses and households, while the Ukraine war has put renewed pressure on world supply chains and raised exporters' operating costs.

(Source: Reuters)

• Wigton Windfarm Limited (WIG) reported a net profit of $472.12Mn for the 12 months ended March 31, 2022, which represents a 40.4% decline in the net profit of $792.70Mn reported in 2021.
• Revenue for the period decreased by 20.9% due to lower levels of production from wind turbines owing to lower wind speed in tandem with lower availability of turbines.
• Also contributing to the decline in the bottom-line was a 3.9% increase in direct costs and 23.9% rise in general administrative expenses.
• Wigton continues to search for ways to reduce the impact of climate change and diversify its revenue base. As such, it is aggressively exploring business opportunities in non-traditional areas, both locally and regionally.
• Additionally, the company is in the process of verifying and certifying emissions reductions from Wigton Phase I and Wigton Phase II. This verification and certification is expected to result in the resumption of the sale of carbon credits by Wigton which will boost revenues.
• WIG’s stock price has increased by 1.9% since the start of the calendar year. The stock closed Wednesday’s trading session at $0.53 and currently trades at a P/E of 13.3x which is below the Main Market Energy, Industrials and Materials Sector Average of 18.2x.

(Sources: JSE & NCBCM Research)