Latest News

Mexican Economy Facing Mounting Internal And External Headwinds Published: 02 July 2019

  • Fitch Solutions have revised down its real GDP growth forecast for Mexico to 1.1% y-o-y in 2019, from 1.7% previously, as mounting trade tensions and sluggish US growth sap industrial and investment activity.
  • National oil company Pemex will struggle to reverse production declines despite rising support from the administration of President Andrés Manuel López Obrador (AMLO)
  • The service sector will remain the primary engine of growth, but sluggish wage growth will likely weigh on retail sales.

 (Source: Fitch)

U.S. Proposes More Tariffs on EU Goods in Airbus-Boeing Dispute Published: 02 July 2019

  • The never-ending dispute between the U.S. and Europe over support to subsidy-reliant aircraft manufacturers Boeing Co. and Airbus SE took another turn when Washington added $4 billion of EU goods that could be targeted as part of the tiff.
  • Needless to say, the Europeans have their own list of retaliatory measures ready should the situation get more serious.
  • Shares in Airbus dropped as much as 1.4% in Paris this morning, with the company calling the whole thing a lose-lose situation.
  • One positive bit of news on the tariff front is that President Donald Trump said measures against Mexico are off the table after the country’s response to immigration flows

 (Source: Bloomberg)

OPEC Allies Agree to Extend Supply Cuts in a Bid to Support Oil Prices Published: 02 July 2019

  • OPEC reached a deal to extend production cuts until March 2020 on Monday.
  • The energy alliance between OPEC and non-OPEC partners, sometimes referred to as OPEC+, has been reducing oil output since 2017.
  • The policy is designed to prevent prices from sliding amid soaring production from the U.S. which has become the world’s top producer ahead of Russia and Saudi Arabia. 
  • International benchmark Brent crude traded at $64.48 Tuesday afternoon, down around 0.8%, while U.S. West Texas Intermediate (WTI) stood at $58.55, almost 1% lower.

 (Source: CNBC News)

Bank of Jamaica Holds Policy Rate at 0.75% Published: 28 June 2019

 

  • Bank of Jamaica (BOJ) yesterday announced its decision to hold the policy interest rate (the rate offered on overnight balances with BOJ) unchanged at 0.75% p.a., effective June 28, 2019.
  • The decision to hold the policy rate unchanged is based on the Bank’s current assessment that monetary conditions are appropriate to support the achievement of the inflation target of 4.0% to 6.0% over the medium term.
  • This decision comes on the heels of Jamaica’s inflation rate coming in at 4.8% for May 2019, back into the target range of 4% to 6% after five consecutive months of annual inflation being below target. 
  • The BOJ also assesses the risks to projected GDP growth to be balanced compared to being skewed to the downside at the May 2019 assessment. 
  • Other macroeconomic indicators continue to be positive. 

 (Source: Bank of Jamaica)

Economic Growth to Trend Higher Following Structural Reforms Published: 28 June 2019

  • Economic growth in Jamaica will accelerate in the coming quarters as economic reforms pay dividends and accommodative monetary policy supports credit growth.
  • The mining sector will be a key engine of growth as alumina and bauxite facilities ramp up production, supporting forecast for real GDP growth to accelerate to 2.1% in 2019, from 1.9% in 2018.
  • Despite improvements, Fitch Solutions expects that structural weakness will limit real GDP growth over the coming decade.

 (Source: Fitch)

Amazon Announced the Creation of Jobs in Costa Rica Published: 28 June 2019

  • On June 26, 2019, Amazon.com, Inc. announced the creation of 2,000 job openings. These positions will be based in Amazon’s dedicated centers in Costa Rica and will include specialist roles in areas such as customer service, technology, cloud services, finance, and accounting.
  • These specialist roles will support Amazon’s customers around the world and provide 24/7 world-class customer service in North and South America, Europe and Asia; in English, Portuguese, Italian, French, and Mandarin.
  • The 2,000 new jobs include virtual (work-from-home) positions to increases opportunities for those who live outside the Greater Metropolitan Area, President Alvarado said.
  • Costa Rica’s President, Carlos Alvarado, said he, along with the private sector, “continues working to reactivate the economy.”

 (Source: The Costa Rica Star)

Barbados: Significant Current Account Deficits in The Coming Years Published: 28 June 2019

  • Barbados will run wide current account deficits over the coming years as machinery and food imports outweigh service exports, principally from tourism.
  • Fitch expects stable foreign direct investment inflows and support from multilateral lenders to provide stability to support Barbados' external account.
  • Fitch Solutions forecasts that Barbados will maintain a significant current account deficit of 3.4% of GDP in 2019 and 3.5% of GDP in 2020, following a deficit of 3.5% in 2018.

 (Source: Fitch)

Xi Fires Shots at U.S. Before Trump Meet, Without Mentioning Him Published: 28 June 2019

  • In conversations with other leaders ahead of his sit down with the U.S. president on the sidelines of the G20 summit in Japan, Xi spared no opportunity to paint the U.S. as the bad guy in China’s spiraling trade conflict, while avoiding the provocative step of naming Trump personally.
  • Xi took a not-so-subtle swipe at Trump’s policy slogan, "America first." Warning against "bullying practices," Xi said that “any attempt to put one’s own interests first and undermine others’ will not win any popularity.”
  • Xi then used remarks on the digital economy to call for a "fair and equitable market environment" and the "completeness and vitality of global supply chains."
  • It comes as Trump singles out Chinese tech giant Huawei, arguing its connections to the government mean it could allow Beijing to spy through its equipment, and urging countries to avoid the company while developing 5G networks.
  • Xi stated that he is opposed to protectionism as well as any "external” influence on the two countries’ relationship.

 (Source: Bloomberg)

Johnson Keeps Option of Suspending Parliament for No-Deal Brexit Published: 28 June 2019

  • Conservative Party leadership candidate Boris Johnson has kept open the option of suspending or proroguing, the U.K.’s Parliament in order to force through a no-deal Brexit.
  • The move would be highly controversial but Johnson says it would be “absolute folly” to tell the European Union that no-deal is completely off the agenda.
  • The woman he’s attempting to replace, Theresa May, has warned she may well vote to stop a hard Brexit scenario, so the opposition to such a move is strong.
  • All this in the face of slumping consumer confidence in Britain.

 (Source: Bloomberg)

Stakeholder Trust Identified as a Pivotal Economic Driver Published: 27 June 2019

  • Engendering greater stakeholder trust across the public and private sectors to drive efficient service delivery is deemed pivotal in any thrust to secure higher levels of sustainable economic growth.
  • This is the view of American bestselling author, Stephen Covey, who was speaking during the 37th Annual Caribbean Conference of Accountants, held recently at The Jamaica Pegasus hotel in New Kingston.
  • Mr. Covey noted data from a study of 41 countries which he said shows that territories with the greatest levels of trust had the highest gross domestic product (GDP) per-capita incomes, and better economic performances.                                                                       
  • He also pointed out that in a “high-trust” culture, “persons are 32 times more likely to take a responsible risk, leading to innovation”.

 (Source: JIS