• The House of Representatives has approved the first supplementary estimates of expenditure for the 2025/26 fiscal year. The Estimates have now moved from $1.26Tn to $1.27Tn.
• In her remarks, Minister of Finance and the Public Service (MFPS), Hon. Fayval Williams, said the estimates will facilitate the allocation of $58.1Bn to ministries, departments, and agencies (MDAs).
• She informed that of this sum, $55.6Bn is earmarked to cover additional salaries and allowances arising from agreements between the Government and public-sector unions and staff associations during fiscal year 2024/25. “This supplementary also takes into consideration the $1.1Bn for the three per cent subsidy on residential electricity usage as expenditure in the central government expenditure budget, and $1.4Bn for the acquisition of 110 buses for the rural school bus service,” the Minister stated.
• Additionally, she said it “facilitates the transfer of $35.3Bn from the contingencies allocation under the Head 20000¹, MFPS, to assist in financing the additional expenditure of the MDAs. It will also assist with the reprioritisation of expenditure totalling $12.3Bn within the 2025/26 approved Budget to assist in financing the additional spending of the MDAs”.
• Mrs. Williams stated that approximately $48.1Bn of the committed funds fall under the ‘compensation of employees’ category. This category includes $23.6Bn allocated for advancement along substantive salary bands for eligible central government employees, effective April 1, 2025, in accordance with the agreement reached with the Jamaica Confederation of Trade Unions (JCTU).
• She further highlighted that while those are some major numbers, there will be a redirection of funds to continue to have a balanced budget for this supplementary.

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^[1]A Budget Category Under the Ministry of Finance and the Public Service.

• Caribbean Cement Company (CCC), on Thursday (June 26), officially commissioned its $6.7Bn (US$42Mn) Debottleneck Project. The project is designed to enhance the production capacity and operational efficiency at the company’s Rockfort facility, which is pivotal in meeting the growing local demand for cement, and to support the island’s infrastructural development goals.
• Speaking at the commissioning ceremony held at the facility’s Rockfort location, Prime Minister Dr. the Most Hon. Andrew Holness emphasised that this significant investment will advance Jamaica’s goals of industrialisation, self-sufficiency, and long-term economic growth.
• He noted that as local demand for cement continues to exceed supply, the country has increasingly been forced to rely on imports, leading to higher costs, delays, and greater dependence on external supply chains, according to the Prime Minister. He added that these vulnerabilities have been exacerbated by the global disruption caused by the pandemic-related logistics breakdown, as well as inflationary pressures and geopolitical tensions.
• This project is expected to stabilise Carib Cement’s kiln operations, maximise clinker production, and help meet Jamaica’s cement needs through domestic output. This is expected to bolster production capacity while contributing to the long-term growth of Jamaica’s construction and manufacturing sectors.
• Additionally, it positions the company to become a net exporter of cement to the wider Caribbean region. Currently, CCC exports primarily to CARICOM member states and has recently begun shipments to the Turks and Caicos. However, exports contribute less than 1% of total revenues, indicating significant untapped potential. This expansion presents an opportunity for CCC to grow its revenue base in regional markets, ultimately driving higher group revenues and improved profitability.

• CCC’s stock price has decreased by 0.8% year-to-date, closing at $83.33 as of Wednesday. At this price, the stock is trading at a price-to-earnings (P/E) ratio of 11.9x, which is lower than the Main Market Energy, Industrials and Materials Sector average of 18.6x.

(Sources: JIS & NCBCM Research)

• There has been a fairly significant improvement in the external accounts of Latin America’s major economies since 2019, which has helped to reduce what is a perennial threat to macro stability in the region. Current account balances in the ‘Big Six’ (i.e., Argentina, Brazil, Chile, Colombia, Mexico, and Peru) have improved by an average of 1.3% of GDP over this period, aided by a 0.9 percentage point (pp) narrowing of the goods trade deficit.
• The tailwind provided by higher commodity prices helped to lift exports (particularly in Brazil, Chile and Peru), while Mexico was the chief direct beneficiary of robust United States (U.S.) domestic demand. These dynamics worked to offset generally solid growth in imports linked to strength in private consumption, which has been driven largely by increased social transfers that have seen fiscal deficits widen throughout the region with the notable exception of Argentina.
• Trends in the region’s balance of payments data look even more positive when considering shifts in the financial account. The core balance, which comprises the current account balance and net FDI inflows, is firmly in surplus for each of the six major economies in the region. This reflects the imposition of government controls on some international transactions in Argentina’s case, but in general terms, the uptick in investor interest in commodities in response to the price action and the allure of ‘nearshoring’ has seen foreign direct investments (FDI) inflows hold up relatively well. Of note, the share of global FDI flowing to Latin America has crept up from 9.1% in 2019 to 14.5% as of 2023 (latest data available).
• These positive developments have, in turn, paved the way for a modest reduction in the external debt ratios, contrasting somewhat with trends seen in other emerging markets and the region’s own experience during the last commodity bull run (roughly 2000-2014). Additionally, narrowing current account deficits have also been used to build back up FX reserves, after they were spent down during the first half of 2020 as concerns over dollar shortages prompted a ‘dash for cash’.
• Looking ahead, Fitch expects that some of the post-pandemic improvement in the region’s external positions will reverse, as a more challenging global macro backdrop linked to shifts in U.S. trade policy works to cap commodity prices relative to recent levels.
• That said, the current account deficit for the Big Six will remain significantly narrower than the 2010-2019 average of 2.7% of GDP, at about 1.5% over 2025-2026. However, anticipated fiscal consolidation across the region over the coming years will help to prevent a more pronounced deterioration. High copper prices in Chile and Peru, as well as a booming agricultural sector and increased domestic energy production in both Argentina and Brazil, should act as further supports.

(Source: Fitch Connect)