• Russian aluminum giant—Rusal—has been making steady payments to Jamaica as part of a 2021 agreement to pay back production taxes it owes the government, according to Jamaican Transport and Mining Minister Audley Shaw. 
• Rusal has paid about 45% so far of a $35Mn bauxite production levy that it owes Kingston, and is current and consistent in payment. As part of the 2021 agreement, Rusal paid the government 40% of the debt upfront last fall and then agreed to make 30 monthly payments starting in November 2021. 
• Russia's March invasion of Ukraine, which Russia terms "a special military operation," fueled a range of international sanctions against Moscow and Russian-based companies. 
• Rusal is not under sanctions by Jamaica or the United States, but the company has warned that Western sanctions on Moscow may complicate its international projects. Rusal, the world's largest aluminum producer outside of China, runs a bauxite and alumina production complex in Jamaica via its subsidiary WINDALCO. 
• WINDALCO has an annual production capacity of 502,000 tonnes of alumina and 4Mn tonnes of bauxite, according to its website. 
• Rio Tinto, one of the world's largest aluminum producers, said earlier this month that any sanctions on Rusal would cause "pretty significant disruption" to the global aluminum market. Given that Jamalco and Alpart are currently closed, sanctions on Rusal and by extension Windalco, would further lower the sector’s contribution to foreign exchange and gross domestic product (GDP) growth. This presents a downside risk to Jamaica’s 2022 real GDP growth forecast of 2.5% (IMF).

(Source: Investing.com & NCBCM Research)

• VM Investments Limited (VMIL) has agreed to make a private equity investment in Home Choice Enterprise Limited, which will see the wealth-building arm of the VM Group acquiring a sizeable stake in the manufacturing and distribution company. 
• The equity injection will allow Home Choice Enterprise to expand its business to meet the growing demand for its products, which include pepper shrimp, sauces, spices, juices, and condiments – in the local and export market. 
• VMIL CEO further noted that the investment is a continuation of a strategic push by VMIL to assist micro, small and medium-sized enterprises to unlock their full potential through financial advisory services and capital financing. 
• Home Choice, which has been in operation for over 22 years, is a staple in the local, regional and international market, with a customer base not only spanning the entire island of Jamaica inclusive of major supermarkets, wholesales, gas stations, gift shops and schools, but wherever there is a strong Jamaican Diaspora presence. 
• Given the favourable outlook of the manufacturing and distribution sector due to local economic recovery for 2022 and beyond, this investment should yield positive results.

(Sources: JIS News & NCBCM Research)

• Tourist arrivals to The Bahamas increased almost ten-fold in March 2022 compared to the prior year aided by the continued easing of COVID-related border restrictions and a rebound in global travel. 
• As major source markets further adjusted to COVID-19 pandemic conditions, initial data indicated that monthly tourism output maintained its growth momentum in March. Air traffic yielded 147,616, compared to 56,371 in the prior year, regaining 73.2% of the volumes registered in 2019. In addition, sea traffic was reinstated at 475,486 from a mere 6,394 visitors in the previous year, when cruise sailings remained suspended. 
• Total arrivals to New Providence amounted to 304,506 in March from 39,093 in the comparative period of 2021. That said the domestic economy is expected to sustain its recovery trajectory in 2022, undergirded by an ongoing strengthening in tourism sector output. 
• However, there are downside risks. The sector remains exposed to the COVID-19 virus, which could potentially stall progress made on the international health front and dampen the travel industry prospects. In addition, elevated international fuel costs could weaken the travel sector’s competitiveness, and major central banks’ counter-inflation policies could erode the consumers (in key source markets) spend on travel.

(Source: The Tribune)

• Prime Minister Dr. Keith Rowley says natural gas production in Trinidad and Tobago will be tight for the period 2024 to 2027 but will improve by 2028. 
• Gas supply between 2024 and 2027 will be tight before improving in 2028 with the new productions coming on stream, the Manatee and Calypso. Gas production is projected to increase from 48.5Mn cubic feet (1.4Mn m³) as of March 2022 to 3.2Trn cubic feet by 2024. However, the key to a sustained gas industry will be the exploration and development of its hydrocarbon resources as well as access to cross-border natural gas resources. 
• The Prime Minister stated that the Government has undertaken the dual responsibility to optimise the sovereign’s hydrocarbon resources for the benefit of its citizens and to reduce its carbon footprint. Investing in renewables and hydrocarbons over time can liberate oil and gas for export markets, and also create a diversified energy mix. 
• It is expected that hydrocarbons, and in particular natural gas, will play a larger role in T&T’s economic growth in the future. The current outlook, due to geopolitical events and energy security issues, suggests that natural gas is increasingly being considered not only as a low-carbon alternative but as the fuel of choice.

(Sources: Trinidad Express Newspaper & CBTT)

• The hot demand for U.S. workers cooled a bit in April, though the number of unfilled jobs remains high and companies are still desperate to hire more people. 
• Employers advertised 11.4Mn jobs at the end of April, according to the Labour Department on June 1, down from nearly 11.9Mn in March, the highest level on records that date back more than 20 years. At that level, there are nearly two job openings for every unemployed person. However, although still high, job openings fell in restaurants and hotels, and also dropped in health care and retail sectors. They however rose in manufacturing, warehousing, and construction. 
• The healthy level of open jobs shows that companies are still trying to add staff and grow, even as inflation hovers near a 40-year high and the Federal Reserve has embarked on what could be its fastest pace of interest rate hikes since the 1980s. 
• The number of people quitting their jobs remained near record highs at 4.4Mn in April, mostly unchanged from the previous month. Nearly all of those who quit do so to take another job, typically for higher pay. 
• The historically high number of unfilled jobs and the number of people quitting has forced employers to pay more to attract and keep staff. Those trends are driving solid wage gains for America’s workers, particularly those that switch jobs. 
• Economists believe employers added 323,000 jobs in May, and that the unemployment rate ticked down to 3.5%, matching its pre-pandemic low, from 3.6%.

(Source: AP News)

• San Francisco’s Federal Reserve President Mary Daly stated on June 1 that she supports raising interest rates aggressively until inflation comes down to a reasonable level. Those moves likely would entail multiple 50 basis point hikes at coming meetings, then a possible rest to see how the central bank policy tightening is combining with other factors to impact the massive surge in consumer prices. 
• Daly said she sees some initial signs of a slowing economy and reduced inflation, but will need to see much more progress before the Fed can slow its efforts. “We aren’t really there yet, so we need to see those data on a slowing economy bringing demand and supply back in balance, and I need to see some real progress on inflation,” she said. 
• Multiple officials have said the 50 basis point moves are likely to continue. Though inflation measures such as the consumer price index and Fed’s preferred core personal consumption expenditures have come off their recent highs, they are still near levels last seen in the early 1980s. 
• Most Fed officials estimate the “neutral” level of their benchmark borrowing rate to be around 2.5%. It currently is targeted in a range between 0.75% and 1%. Daly said issues such as supply chain backlogs, the war in Ukraine, and the China economic reopening after a COVID-related shutdown will be factored into whether inflation has peaked. If inflation should persist or become progressively worse then she suggests that the Central Bank go into restrictive territory with the benchmark increases.

(Source: CNBC)

• For April 2022, output prices for producers in the Mining and Quarrying industry decreased by 1.8%. This outturn was mainly attributed to a 1.8% fall in the index for ‘Bauxite Mining & Alumina Processing’. This fall was due to the appreciation of the Jamaican dollar when compared to the United States dollar over the review period. 
• On the other hand, the index for the Manufacturing industry increased by 1.6%. The main contributors to the increase in the index were the rise in the sub-indices such as ‘Refined Petroleum Products’ up by 6.3%, ‘Food, Beverages & Tobacco’ up by 0.6%, and ‘Other Non-Metallic Mineral Products’ up by 0.1%. These increases were mainly due to higher cost for raw materials. 
• Along with the other industries, the manufacturing industry continues to be adversely affected by higher costs for shipping and raw materials on the international market owing to both the lingering effects of the pandemic and the current geopolitical tensions between Russia and Ukraine. 
• These April outturns contributed to a 12-month point-to-point (April 2021 – April 2022) increase in both the Mining & Quarrying and Manufacturing industry indices of 35.5% and 23.4%, respectively. It is anticipated that these indices will rise further in the near term as the Russia-Ukraine conflict and its impact on commodity prices continue to unfold.

(Sources: STATIN & NCBCM Research)

• Fitch Solutions forecast that Jamaica’s government will reduce its fiscal deficit to 0.1% of GDP in FY2022/23 (April 1 – March 31), from an estimated 0.3% in FY2021/22, as revenue growth outpaces spending. 
• The government ran budget surpluses from FY2017/18 to FY2019/20 to comply with consecutive IMF programmes from 2013 to 2019. However, the impact of the pandemic caused economic activity and government revenues to contract in FY2020/21, flipping the balance into deficit. 
• With the effects of the pandemic subsiding, it is expected that the government will return to a path of consolidation in the coming years as it winds down social spending initiatives enacted during the pandemic. In the short-to-medium term, it is forecasted that the government will likely increase debt repayments and contain current expenditures, resulting in a budget surplus in FY2023/24.

(Source: Fitch Solutions)

• The Caribbean’s tourism renaissance is well underway, with some destinations approaching or exceeding record visitor arrival numbers.
• Tourism officials cite pent-up traveler demand, the elimination or significant reduction in travel restrictions, the return of airlifts, upgrades and attractive deals and packages being offered by hotels, as well as a variety in destination and hotel choices available as key factors for the rebound. 
• ForwardKeys, Caribbean Hotel and Tourism Association’s (CHTA) data partner, recently reported that the Caribbean and Latin America are leading the summer outlook in terms of the return of leisure travel, noting that five destinations – Aruba, Jamaica, Dominican Republic, Mexico, and The Bahamas – are among the “most resilient” based on confirmed arrivals for the summer. 
• As such, the CHTA’s President Nicola Madden-Greig noted that, on average, hotels and resorts in the Caribbean will approach close to 80% of their record pre-pandemic performance this year, with some destinations setting all-time records. Cruise ships are returning, which is especially important to attractions, transportation providers such as independent taxis, and small- and medium-sized vendors. In addition, investment in new and upgraded hotels and resorts has not slowed, with more than 30,000 rooms in development or under construction over the next five years. 
• However, there are new challenges facing the industry, as inflation is resulting in higher operating and travel costs and the uncertainty in Eastern Europe impacts travel. However, “while the cost of travel increases worldwide due to these and other factors, we will continue to focus on providing value and exceptional traveler experiences,” said the CHTA leader.

(Source: St. Thomas Source)

• Minister of Parliamentary Affairs and Governance Gail Teixeira explained to Region Seven residents that the government’s Low-Carbon Development Strategy (LCDS) 2030 is “a mixed energy approach” to address the issue of climate change.
• She noted that the new and expanded LCDS allows for sustainable development in every sector, including agriculture, oil and gas, and infrastructure, while at the same time reducing the effects of climate change, and protecting the environment. “When we look at what we call a mixed energy approach, we will continue to exploit oil and gas to reduce the cost of electricity, so that our people will have reliable, affordable electricity, and also the manufacturers and others will have a reliable source to produce,” the minister said. 
• Citizens of Guyana will accrue tremendous benefits as the strategy will create hundreds of jobs. Notably, over the past seven years, Guyana has earned approximately US$200Mn through carbon services. This means the country was generating substantial income by sustainably managing its rainforest.

(Source: Guyana Chronicles)