Online Banking

Latest News

Lingering Impacts Of Pandemic Will Undermine Jamaican Economic Recovery Published: 28 October 2020

  • The global spread of COVID-19 will weigh on tourism demand in the quarters ahead, delaying Jamaica’s economic recovery.
  • High unemployment and ongoing public health restrictions will weaken private consumption, while reduced external demand will undermine exports.
  • Fitch Solutions has revised down its 2020 real GDP forecast to -7.1% y-o-y, from -5.8% previously, following a late-August spike in COVID-19 cases in Jamaica that limited commercial activity. Growth for 2021 is forecasted to return at 1.1%.

(Source: Fitch Solutions)

Fitch Solutions Expects Policy Continuity In Jamaica Published: 28 October 2020

  • The center-right Jamaica Labour Party’s (JLP) sizeable victory in Jamaica’s September 3 election will improve policy enactment and ensure policy continuity in the quarters ahead.
  • Fitch Solutions noted that fiscal consolidation will remain a priority, but also noted that the government will be forced to increase expenditures in response to the domestic outbreak of Covid-19 and the slowdown in economic activity. The Bank of Jamaica (BOJ) will keep its monetary policy rate at 0.50% through end-2021 in order to boost lending amid the economic fallout from the Covid-19 pandemic.
  • External account stability is unlikely to be challenged by a sustained current account deficit in the coming years. Improved reserves, an IMF programme and capital inflows will likely be sufficient to ensure stability.
  • The Jamaican dollar (JMD) will depreciate over the coming months due to a limited supply of US dollars in Jamaica and high inflation. While the BOJ supported the value of the JMD in H2 2020, the agency expects that it will take a less active role in moderating the FX market.

(Source: Fitch Solutions)

Paraguay Will Prioritize Public Security After Pandemic Published: 28 October 2020

  • Fitch Solutions expects Paraguayan President Mario Abdo Benítez will prioritize improving security conditions over the coming months as the economy begins to recover in the wake of Covid-19.
  • Despite violations of the country’s fiscal rule in the wake of Covid-19, it is likely that the conservative government will remain committed to lowering deficits over the coming years and maintaining the existing fiscal framework.
  • Paraguay scores a 57.0 out of 100.0 on our Short-Term Political Risk index, largely the result of a poor security environment, a fractured Congress, and factions within the ruling ANR-PC party that will hinder policy formation.

(Source: Fitch Solutions)

More Work To Be Done As Guyana Welcomes Removal From FATF Watch List Published: 28 October 2020

  • Following the August 2nd declaration of results of the March 2nd elections, Guyana has been removed from the Commonwealth’s watch list after fears had arisen that a rigged result was in the making.
  • However, Guyana must prove its effectiveness in being able to convict those who launder money and pilfer state assets if it is to remain off the Financial Action Task Force (FATF) watch list.
  • Progress would have been reflected in the country passing the fourth round of Mutual Evaluation tests which are scheduled for 2020.
  • According to the Country’s Minister of Legal Affairs and Attorney General Basil Williams, the test is whether [Guyana] would have shown sufficient progress on effectiveness, for example having more conviction for offenses of money laundering, terrorist financing, and the purloining of state assets.
  • He also stated that the capacity of the judicial system will have to be developed in order to meet this requirement.

(Source: Guyana Department of Public Information)

U.S. Core Capital Goods Orders Increase Solidly In September Published: 28 October 2020

  • New orders for key U.S.-made capital goods rise more than expected in September, wrapping up a quarter of potentially record growth in business spending and the economy, thanks to fiscal stimulus aimed at softening the blow from the Covid-19 pandemic.
  • The report from the Commerce Department on Tuesday followed robust data this month on retail sales and the housing market. But government money has dried up and new coronavirus infections are surging across the country, leading economists to anticipate a slowdown in activity in the fourth quarter.
  • Core capital goods orders, which have pulled above their pre-pandemic level, were in September boosted by increased demand for primary metals, fabricated metal products, and computers and electronic products. But orders for machinery and electrical equipment, appliances and components fell.

(Source: CNBC)

Oil In Reverse As Rise In U.S. Crude Stocks Fans Oversupply Fears Published: 28 October 2020

  • Oil prices went into reverse on Wednesday, giving up the previous day’s gains as a surge in U.S. crude stocks and rising coronavirus infections in the United States and Europe fanned fears of a supply glut and weaker fuel demand.
  • Brent crude futures LCOc1 were down $1.60, or 3.8%, at $39.60 a barrel, having climbed nearly 2% on Tuesday. U.S. crude CLc1 was down $1.84, or 4.6%, at $37.73 after a 2.6% jump the previous day.
  • S. crude oil and gasoline stocks rose last week, data from the American Petroleum Institute showed, with crude inventories rising by 4.6 million barrels to about 495.2 million barrels, well above analyst expectations of a 1.2 million barrel build in a Reuters poll of analysts.

(Source: Reuters)

Businesses’ Inflation Expectations Rise Published: 27 October 2020

  • The September 2020 inflation survey indicated expected inflation of 6.7% for the calendar year  2020, which is marginally higher than the July 2020 survey outturn of 6.2%. The expected inflation 12 months ahead also increased marginally to 7.0% relative to the previous survey outturn of 6.5%.
  • The perception of inflation control declined slightly in the September 2020 survey relative to the July 2020 survey.
  • Respondents anticipate that the currency will depreciate over the 3-month, 6-month, and 12- month time horizons at a faster pace relative to the previous survey. The majority of respondents continued to believe that the Bank’s policy rate will remain the same over the next three months.
  • The Present Business Conditions Index reflected a slightly higher level of optimism while the Future Business Conditions Index illustrated a sharp decline in optimism compared to the previous survey.

(Source: BOJ)

Everything Fresh Jamaica Limited (EFRESH) Completes Expansion to Bahamas Published: 27 October 2020

  • Consistent with its vision when Everything Fresh Jamaica Limited (EFRESH) completed its IPO, the company has sought to replicate its operations in other islands of the Caribbean region.
  • In early 2019, the company began exploring a transaction that would accomplish this critical diversification goal. Now with the completion of the transfer of a 60% stake of Everything Fresh Bahamas Limited to the parent company Everything Fresh Jamaica Limited, the listed company takes this opportunity to update all shareholders.
  • Everything Fresh Bahamas Limited is focused on supplying food products to supermarkets and the retail trade in the Bahamas. Despite the challenges of the COVID-19 pandemic, it is expected that the company will continue to deliver value to the market and grow further in the near term.

(Source: JSE)

Investors Brush Off Downgrade Risk and Pile Into Colombian Debt Published: 27 October 2020

  • International investors are piling back into Colombian bonds amid optimism the economy is poised to recover from its worst downturn on record, brushing off risk the nation could lose investment-grade credit status.
  • Foreign demand for the local debt hit a record in September, with net inflows of 5.3Tn pesos ($1.4Bn), leaving overseas investors holding a total of about $21.4Bn, according to the Finance Ministry. It marked the fifth consecutive month of increases after investors sold off emerging-market assets as the coronavirus lockdowns accelerated in March.
  • While there is uncertainty over whether a second outbreak may cause another wave of lockdowns, Lopez forecasts a 4.2% rebound in 2021. The government expects the economy to contract 5.5% this year, the worst since record-keeping began more than a century ago.

(Source: Bloomberg)

Argentina Mulls Incentives for Job Growth, Labour Minister Says Published: 27 October 2020

  • Argentina is considering fiscal incentives to encourage companies to hire workers after unemployment spiked to 13% in the second quarter, the highest in at least 16 years amid the pandemic.
  • Labour Minister Claudio Moroni said he’s been working with the Production Ministry to lower some employer contributions. The incentives will probably be aimed at hard-hit industries in Argentina’s least-favored provinces, he said. The administration of President Alberto Fernandez also recently rolled out an ambitious initiative to provide some 3 million workers with training customized to employers’ needs.
  • The fast deterioration of the labor market comes in spite of the government’s initiatives to offset the economic impact of the pandemic. Argentina has banned firing workers and also forced companies to pay double the ordinary amount of severance if they discontinue operations in the country. On top of that, the government is paying half of private-sector workers’ salaries to support firms that have lost revenue during the crisis.

(Source: Bloomberg)