• Brazil's central bank is expected to deliver a third consecutive 25-basis-point interest rate cut on Wednesday, June 17, according to a Reuters poll of economists. This lowers the benchmark Selic rate to 14.25% as policymakers gradually unwind borrowing costs from near two-decade highs while contending with persistent inflation pressures. The monetary policy committee, known as Copom, began a moderate easing cycle in March after holding the cost of borrowing at 15.0% through the second half of 2025.
• Of 45 economists polled between June 12 and June 15, 41 expect a quarter-point cut while four anticipate no change. “The committee's communication between meetings is consistent with a further reduction in the Selic rate at a similar pace,” said Joao Savignon, head of macroeconomic research at Kinitro Capital. However, he noted the overall planning of the cycle had become more uncertain. Policymakers are likely to retain a cautious tone given persistent consumer-price pressure.
• Annual inflation in Latin America's largest economy accelerated to 4.72% in May from 4.39% in April, drifting further above the central bank's 3% target, which carries a tolerance band of 1.5 percentage points on either side. The El Niño weather pattern has emerged as an additional inflation concern, BTG Pactual economists noted, warning that with some further unanchoring of expectations “the scope for interest rate cuts this year becomes virtually nil.”
• Nearly two-thirds of poll participants who answered an additional question, 19 of 31, expect another 25-basis-point cut at the next meeting in August. Median quarterly forecasts point to the Selic ending 2026 at 13.75% and closing 2027 at 12.00%, broadly in line with consensus views from the central bank's weekly survey of economists.

(Source: Reuters)

• BMI expects Panama's real GDP to grow 3.8% in 2026, an upward revision from an initial 3.0% forecast driven largely by higher investment and mining activity. The government's decision to authorise First Quantum Minerals to remove and process stockpiled ore at the Cobre Panama mine is expected to provide a short-term boost to several macroeconomic figures. Even so, structural conditions remain weak, with domestic consumption showing strong volatility and averaging just 1.8% annual growth between 2020 and 2025.
• Data on consumer prices, imports of consumer goods and vehicle sales point to both a slowdown in domestic consumption and a shift in spending patterns. Imports of consumer goods opened the year with one of the sharpest year-over-year declines of the past five years, yielding a modest 2.1% average growth rate in the first quarter and extending the soft 1.3% expansion recorded in 2025.
• Subdued import activity has fed through to consumer prices, with inflation remaining weak for two consecutive years, negative 0.2% in 2024 and 0.3% in 2025, and only beginning to tick up on higher fuel prices linked to the US-Iran conflict. Soft inflation across key categories such as food and beverages, clothing and housing underscores the persistent weakness in household demand.
• BMI's forecast assumes a moderately better scenario for private consumption from 2026 onward, though households are expected to stay budget-constrained and to favour essential goods and services over luxury items. Downside risks include the external geopolitical backdrop, climate effects, chiefly El Niño and its impact on transit through the Panama Canal, and the potential for internal social unrest to weigh on activity, employment and consumer spending.

(Source: BMI, A Fitch Solutions Company)

• A US$300Bn private fund designed to trigger investment into Iran is outlined in the U.S.-Iran framework agreement, with more than half of the funding already committed. The fund is intended to provide both sides with an economic incentive to conclude a final agreement.
• The fund, which is to be called the Reconstruction and Development Fund, is a private investment vehicle, not a reconstruction or reparations programme, and will not include any government money or grants. Companies based in the United States, Gulf Arab states, Asia, South America and Africa have reportedly agreed to commit financing, with investments spanning sectors including energy, logistics, manufacturing and transport.
• The investment fund emerged after Iran initially sought US$400Bn in compensation for war damages from the United States. According to sources, Washington rejected that proposal, leading negotiators to develop the fund as an alternative mechanism.
• Iran, one of the Middle East's largest economies, has attracted almost no significant foreign direct investment in the past four decades, frozen ​out of global capital markets by successive waves of U.S. and international sanctions. However, the country possesses the world’s second-largest proven natural gas reserves, the fourth-largest proven oil reserves, and a population of more than 92 million people, creating significant long-term investment potential.
• The investment fund is separate from negotiations on the lifting of U.S. sanctions and the release of Iranian assets frozen abroad. In addition, it will not become operational until a final agreement is reached, with the current memorandum of understanding intended to guide negotiations over the next 60 days.
• The proposed fund represents a significant shift toward an economic reconstruction framework. If implemented, it could help attract foreign capital into sectors that have remained largely isolated from global investment for decades, while providing Iran with a strong economic incentive to maintain compliance with a final nuclear and security agreement.

(Source: Reuters)

• The Bank of Japan (BOJ) raised its short-term policy rate to 1.0% from 0.75%, taking borrowing costs to their highest level since 1995. The move marks the first rate hike since December and reflects the central bank’s continued policy normalisation efforts.
• Deputy Governor Shinichi Uchida signalled that the BOJ remains prepared to tighten policy further, citing the risk that underlying inflation could rise above the central bank’s 2% target despite easing economic risks associated with the Iran war.
• While the recent U.S.-Iran peace deal helped reduce concerns about a prolonged energy supply shock, the BOJ noted that firms are increasingly passing on higher costs and raising wages. Japan’s wholesale inflation rose to a three-year high of 6.3% in May, signalling that higher energy costs are already feeding through the economy.
• According to the BOJ, there is a risk that medium- and long-term inflation expectations could continue to rise, increasing the possibility that underlying inflation deviates above its target. Analysts expect the BOJ to raise rates again before year-end, with some suggesting that persistent inflationary pressures, a weak yen, and continued pass-through of import costs could justify another increase as early as October.
• The Middle East conflict has complicated the BOJ’s policy path by pushing up oil prices and adding inflationary pressure to an economy heavily reliant on imported fuel. Although the bank believes the risk of a sharp economic deterioration has diminished due to progress in securing alternative energy supplies, it warned that rising oil costs could continue to lift consumer prices across a broad range of goods.
• The BOJ’s latest decision highlights a shift in focus from supporting growth to preventing inflation from becoming entrenched. While the easing of tensions in the Middle East has reduced downside risks to the economy, policymakers appear increasingly concerned that higher energy costs, stronger wage growth and a weak yen could keep inflation above target, necessitating further policy tightening.

(Source: Reuters)

• The latest Data from the Statistical Institute of Jamaica (STATIN) show that consumer prices recorded the largest monthly increase since November 2025, when Hurricane Melissa’s impact on agricultural produce caused a 2.4% monthly surge in prices. The CPI rose by5% in May, contributing to the 5.4% 12-month point-to-point (P2P) inflation.
• May’s monthly increase was driven primarily by a 1.9% rise in the index for the ‘Food and Non-Alcoholic Beverages’ division. This movement was largely attributable to higher prices for agricultural produce, including tomatoes, cabbage, carrots, ripe bananas and pineapples, which resulted in a 4.8% increase in the index of the class ‘Vegetables, tubers, plantains, cooking bananas and pulses’.
• Also contributing to the increase was the ‘Restaurants and Accommodation Services’ division, recording a 5.7% rise in its index. STATIN noted this reflected higher prices for some meals consumed away from home. The monthly increases contributed to P2P increases of 8.7% for the ‘Food and Non-Alcoholic Beverages’ division, 6.9% for ‘Restaurant and Accommodation Services’ and 3.1% for Transport.
• Notably, P2P and monthly contributions from ‘Housing, Water, Electricity, Gas and Other Fuels’ had one of the smallest monthly increases, up 0.7%. While there was a 2.9% increase in the price of electricity and gas and other fuels, it was tempered by a 1.8% increase in the cost of Housing and Water Supply. More relief may be incoming, with expectations of a formal signing of the U.S.-Iran peace agreement on June 19^th and the subsequent reopening of the Strait of Hormuz. This could support a gradual normalisation of energy costs, as crude oil prices trend downwards.
• While the reduction in fuel prices should provide some relief from rising costs, inflationary risks remain. The government recently approved a 16% fare increase for all Public Passenger Vehicle (PPV) operators, to be implemented over June and July. This adjustment is expected to be a key driver of inflation over the next 12 months. For context, a 19% increase in PPV fares in 2023 resulted in an average 10% rise in the Transport division of the CPI, with the effects persisting for roughly one year. Given this relationship, we expect the latest fare increase to have a similar impact, exerting upward pressure on transportation costs and contributing to higher overall price levels.

(Source: STATIN & NCBCM Research)

• Expenditure channelled through the National Reconstruction and Resilience Authority (NaRRA) to support Jamaica’s recovery from Hurricane Melissa will mark the largest economic intervention in a generation, with the potential to increase gross domestic product (GDP) by more than 20 per cent.
• This was disclosed by Prime Minister, Dr. the Most Hon. Andrew Holness, while addressing the 41st annual awards banquet of the Jamaica Chamber of Commerce (JCC, held at The Jamaica Pegasus hotel in New Kingston on Thursday (June 11). Jamaica secured up to US$6.7 billion in international financing to drive national recovery and resilience, following Hurricane Melissa.
• The inflows will be channelled through NaRRA and are being provided by the International Monetary Fund (IMF), World Bank Group (WBG), Inter-American Development Bank (IDB), Development Bank of Latin America and the Caribbean (CAF), and the Caribbean Development Bank (CDB).
• NaRRA will serve as the central coordinating body for post‑hurricane recovery, eliminating bureaucracy, reducing fragmentation, and preventing project delays. It will also function as a hub of technical excellence for project preparation and delivery, ensuring that national plans meet the scale of Jamaica’s ambitions.
• The Prime Minister stressed that the existing bureaucracy is incapable of delivering the scale of transformation required for Jamaica’s recovery from Hurricane Melissa. Against this background, Dr. Holness underscored that the private sector’s role will be critical to the recovery process.
• The Prime Minister added that the sector is essential to building supply chains capable of responding effectively to future crises. He further noted that NaRRA is not solely about government expenditure and urged the private sector to actively utilise the platform.

(Source: JIS)

• The Caribbean Development Bank (CDB) has expressed that Guyana remained the region’s dominant economic performer in 2025, but warned of fiscal pressures and structural risks.
• In its Caribbean Economic Review and Outlook 2025-2026, the CDB estimated that Guyana’s economy expanded by 19.5% in 2025, making it the fastest-growing economy in the Caribbean. While lower than the extraordinary 43.6% growth recorded in 2024, Guyana continued to be the principal driver of regional economic growth.
• Nevertheless, the report identified several areas of concern as massive government spending continues to drive deficits. Despite booming revenues, Guyana’s fiscal position remained in deficit on the back of its aggressive public investment programme. According to the CDB, government expenditure increased by 13.4% to US$3.3Bn (12.1% of GDP) while current expenditure also rose sharply by 21.2%. Although revenues and grants jumped 27.4% to US$4.8Bn, supported by higher tax collections and resource revenues, the scale of spending meant Guyana still recorded an overall fiscal deficit of 5.5% of GDP and a primary deficit of 5.1% of GDP.
• Further to this, unlike Trinidad and Tobago and Suriname, Guyana experienced a decline in exports while imports increased, resulting in a smaller merchandise trade surplus. Guyana’s international reserves increased during the year but remained below the commonly used benchmark of three months’ import coverage when the Natural Resource Fund (NRF; US$3.43Bn at the end of 2025) is excluded from the calculation. That finding underscores the reality that rapid growth is being accompanied by equally rapid import demand for machinery, construction materials, equipment and consumer goods.
• Looking ahead, the CDB projects that Guyana’s economy will grow by an even stronger 21.9% in 2026, driven by a projected 25.3% increase in oil production to 327.3 million barrels. The country’s performance is expected to lift overall Caribbean growth to 6.2%, compared with just 1.1% for the rest of the region.
• Throughout the review, the CDB repeatedly stressed the need for stronger implementation capacity, improved project execution, resilient institutions and prudent fiscal management. It also warned that the Caribbean faces heightened risks from global uncertainty, geopolitical tensions, commodity price volatility and climate shocks.

(Sources: Kaieteur News & Bank of Guyana)

• Costa Rica's fiscal revenues are projected to remain subdued in 2026, primarily depressed by lower tax receipts – particularly from customs – alongside sluggish sales tax collections during the first quarter. This fiscal underperformance has subsequently drawn concern from the International Monetary Fund (IMF).
• Official data from the Costa Rican Central Bank showed a 10.8% decrease in overall fiscal revenues in March 2026, the third-lowest year-on-year (YoY) performance of the past three years and a -3.5% cumulative YoY growth. The decrease is mostly explained by the appreciation of the Costa Rican Colón against the U.S. Dollar, along with softer domestic demand, which has reduced sales tax collections.
• Modest performance of tax collections for the year was already expected, with a goal of 2.2% growth in tax collections set in the 2026 government budget. Still, current performance falls below the already pessimistic expectations for this year.
• This unfavourable revenue performance also caught the attention of multilateral organisations, particularly the IMF. Following its yearly Article IV revision of the Costa Rican economy, the IMF flagged the decline in tax collection and issued policy recommendations to the Costa Rican authorities, underscoring the urgency to adopt revenue-enhancing measures. Specifically, the Fund urged the government to increase revenues and manage public debt to ensure sufficient resources for capital investments and key spending priorities such as education, health, security and social transfers.
• While the IMF has less direct leverage on the Costa Rican government than it did under the Extended Fund Facility (EFF) programme in place between 2021 and 2024 (that conditioned disbursements of the programme on meeting specific fiscal goals), the current US$1.5Bn flexible credit line still requires the Costa Rican authorities to demonstrate "solid macroeconomic fundamentals" and increases the need to address IMF's macroeconomic concerns on the country.
• BMI expects the government's response to stop short of tax hikes. Shortly after the IMF published its concluding statement, authorities announced plans to revise fiscal-related regulations, outlining a framework of measures to address the revenue shortfall and revisit existing tax benefits. Finance Minister Rodrigo Chaves ruled out any tax hike, indicating that instead the proposal would focus on combating tax evasion, contraband and alleged income tax fraud. Revisions to tax benefits on basic food basket products are also expected, which would likely raise consumer prices and impact the purchasing power of Costa Rican households.
• That said, the draft of these fiscal-related reforms is still in early stages and is expected to reach the Executive Cabinet in July 2026, reflecting downside risks to fiscal revenues and overall public finances, while pressing the government to continue with limited spending policies

(Source: BMI, A Fitch Solutions Company)

• The announcement of a peace deal with Iran has buoyed energy markets and improved the outlook for the reopening of the Strait of Hormuz. Brent crude prices tumbled by as much as 5.7% to below US$83 per barrel, and oil prices are now more than 30% below their peak at the height of the war.
• According to US President Trump, both sides agree that a final deal will see “the toll-free opening of the Strait of Hormuz,” with the agreement scheduled to take effect on Friday, June 19, 2026, as a 60-day window for nuclear talks kicks off.
• The agreement is a clear positive for consumers facing high gas prices and oil companies looking to refill inventories. However, uncertainty remains about what happens after the initial 60-day period, as Iran has indicated it could begin charging ships for services. At the same time, the Trump administration maintains that the waterway should be permanently toll-free.
• Despite optimism surrounding the deal, traders and analysts remain cautious. The actual text of the accord has not yet been released, and there was little sign of a sudden upturn in shipping traffic, with mine-clearing operations expected to slow the recovery process. Further, Capital Economics highlighted that it remains unclear how quickly tankers will return to collect oil and LNG cargoes.
• While the agreement marks an important step toward restoring energy flows, analysts expect the recovery in shipping, production and trade to be gradual. As a result, oil prices are expected to remain sensitive to developments surrounding the Strait’s reopening, shipping confidence and the outcome of the upcoming nuclear negotiations.

(Sources: Bloomberg & Yahoo Finance)

• While oil markets have reacted with enthusiasm to an interim agreement between the U.S. and Iran, which should reopen the Strait of Hormuz and restore oil and gas flows, analysts warn that a return to normality could be months away.
• A US-Iran deal will ease supply risk, but rebuilding confidence among shipowners, insurers and refiners will take longer. Many buyers have already adapted to the disruption by securing alternative supplies and routes, meaning there will be no straightforward return to pre-war trade.
• Shipping activity is expected to recover gradually, as some companies have indicated that they will wait until the deal is formally signed before attempting to cross the Strait. Meanwhile, insurance requirements, mine-clearing operations, and port congestion could further delay the recovery.
• Middle Eastern producers have been forced to shut in more than 10Mn barrels per day of oil production since the Strait was closed three and a half months ago. Producers will need time to fully ramp up wells, while the status of the Strait remains uncertain even if it reopens as expected.
• Production recovery is expected to vary by country. While producers such as Saudi Arabia and the United Arab Emirates may be able to restore output relatively quickly, countries like Iraq could face greater challenges after shutting in a larger proportion of production. Wood Mackenzie analysts estimate affected fields could return to 70% of prior production within three months and 90% within six months, with full recovery taking considerably longer.
• Further, analysts cautioned that oil prices could remain supported despite the agreement. Nations are expected to replenish depleted stockpiles and strategic petroleum reserves, while slower-than-expected supply recovery and continued uncertainty surrounding the deal could keep some geopolitical risk premium embedded in the market.
• Although the agreement could mark the end of the conflict between the U.S. and Iran, analysts stressed that it marks only the beginning of what is likely to be a long recovery process for the global oil and gas industry.

(Sources: Bloomberg & OilPrice.com)