• The Ministry of Agriculture, Fisheries and Mining has allocated $134Mn to provide tangible relief to farmers affected by the current dry period. Portfolio Minister, Hon. Floyd Green, made the disclosure during a statement in the House of Representatives on Tuesday (February 4).
• He indicated that while no parish has experienced a meteorological drought, seven recorded below-average rainfall, with measurements in December 2024 ranging from 53% to 85% of their 30-year climatological means. “This means that seven parishes got lower rainfall than their 30-year average.
• Recognising the urgency of the situation and the potential impact of drier months ahead, particularly February, March and July, Mr. Green said the Ministry has already commenced taking the necessary steps to alleviate the effects of the dry period and brace for the months to come.
• “First on the front lines is water trucking, to aid in the hardest-hit parishes of St. Elizabeth, Manchester and Clarendon. The Ministry has already committed $30Mn, of which $14Mn will be administered by the Rural Agricultural Development Authority (RADA) and $16Mn by the National Irrigation Commission (NIC) to accelerate delivery and to ensure that our farmers get the water that they need,” he outlined.
• Mr. Green further explained that $79Mn has been earmarked to procure the tanks and drip irrigation kits. The Ministry is also partnering with individual farmers and groups of farmers to establish water catchment areas, necessitating the provision of pond liners.
• “We have earmarked $17Mn to provide pond liners in response to our ongoing dry period,” Mr. Green said. Additionally, $8Mn is being earmarked to provide grass mulch, a powerful input to help farmers retain soil moisture and safeguard crops.

(Source: JIS)

• Clearing the way for the continuation of transformative interventions, Guyana’s largest budget of $1.382Tn on Wednesday, February 6, 2025, was passed in the National Assembly. This year’s budget, which was noted was fully financed with no new taxes, was approved during the 100th sitting of the Twelfth Parliament, following the completion of the budget debate and consideration of estimates and expenditures over the past few weeks.
• To be included in this year’s budget is the sum of US$2.463Bn or GYD$512.4Bn to be withdrawn from the Natural Resources Fund (NRF) for the financial year 2025 following the NRF Act of 2021.
• When the budget was presented to the National Assembly in January, the Senior Minister within the Office of the President with responsibility for Finance, Dr Ashni Singh, indicated that the formulation of the budget with no new taxes marks a significant step towards fulfilling the People’s Progressive Party/Civic (PPP/C) government’s commitment to sustainable economic development.
• The historic budget is set to serve a dual purpose to complete and exceed the undertakings promised by the PPP/C administration in its 2020 manifesto and further lay the foundation for the PPP/C’s next term in office.
• In the most recent budget, the Government of Guyana listed several measures to be executed, including an increase in the income tax threshold from $100,00 to $130,000 per month or $1,560,000 per annum. This represents a 100% increase in the last five years. This measure is expected to benefit 22,000 people by removing them from the tax net. Adjustments to income tax rates and taxable bands will also be enacted, along with income tax relief for overtime pay and income from second jobs.
• Social welfare and other fiscal measures will also be implemented including, Reduction in electricity costs; Containing the cost of fuel; Abolition of bridge tolls; Reduction in freight charges; Continuation of a part-time job programme; increase in old age pension; Free university and technical and vocational education; a one-cash grant of $100,000 for every citizen 18 years and over, among other measures.
• Finally, this year, the continuation of several transformational projects is expected including the advancement of Guyana’s energy sector for which some $88 billion has been set aside. This includes the continued expansion of renewable energy and upgrading infrastructure.

(Sources: Guyana Chronicle & PWC)

• Real GDP growth in Barbados was 3.6% in 2024, up from a previous 1.8% estimate, owing to lower inflation than expected and strong tourism receipts as estimated by Fitch Connect.
• In 2025, real GDP growth of 2.5% is forecasted up from 1.8% previously, reflecting the view that the continued strong performance of tourism will bolster the labour market and consumer spending.
• Nevertheless, headline real GDP growth will remain subdued, overall. While tourist arrivals will be strong in 2025, emerging capacity constraints in the sector will prevent growth from remaining as robust. The Barbados Hotel and Tourism Agency expects hotel capacity to be nearly 100% in the first months of 2025. Thus, a high base means that tourism’s impact on growth will be more muted, without a further expansion in accommodation, which will take time to come online.
• Additionally, fiscal consolidation will prevent faster growth, with severe weather events or a further rise in geopolitical tensions posing downside risks to Fitch’s outlook.
•  On the upside, a lasting peace in Gaza, the ceasefire in Ukraine, and reduced Israel-Iran tensions could lower oil prices globally, feeding through into lower inflation in Barbados.

(Source: Fitch Connect)

• The Federal Reserve announced on Wednesday it would be testing big banks against heightened stress in commercial and residential real estate markets as part of the U.S. central bank's annual stress tests.
• The Fed added that the annual exams would include an additional exploratory component that would examine shocks in the non-bank sector, as well as the impact of hypothetical shocks of numerous large hedge funds on big bank finances.
• The new scenarios largely track with prior year scenarios from the Fed that examine how large banks are situated to weather severe economic downturns, and in turn dictate how much capital they must set aside against potential losses.
• In the 2025 version, U.S. unemployment would jump from 5.9% to 10%, alongside a 33% decline in home prices and a 30% decline in commercial real estate. Large banks with significant trading operations are also tested against the failure of their largest counterparty.
• The Fed also noted on Wednesday that it still plans to pursue changes to reduce the volatility in the results and make the process more transparent.

(Source: Reuters)

• The Bank of England (BoE) cut interest rates by a quarter-point and some policymakers wanted a bigger move to offset a slowdown, but the BoE said it would be careful about further moves in the face of an expected inflation spike and global economic uncertainty.
• Thursday's cut marked the third since the BoE started lowering borrowing costs from a 14-year high in August. It leaves British rates among the highest for advanced economies and at the top of the U.S. Federal Reserve's range of 4.25-4.5%.
• The BoE also halved its 2025 growth outlook - a blow for finance minister Rachel Reeves who is seeking to speed up the economy - while a jump in inflation to almost double the central bank's 2.0% target this year would probably be temporary. Analysts focused on the downbeat growth outlook which the BoE said had weakened since its last forecasts, published a few days after Reeves' budget announcement.
• Hit by worries among businesses about the economic policies of the new Labour government, the risk of a global trade war led by U.S. President Donald Trump, and rising costs, Britain's economy has barely grown since mid-2024. The BoE said it likely contracted by 0.1% in the three months to December.
• It said it was unclear exactly how any future U.S. trade tariffs would affect inflation in Britain, but said higher global tariffs were likely to cause slower growth, even if Britain was not specifically targeted. Governor Andrew Bailey said this global uncertainty was a factor behind the decision to add the word "careful" to the bank's guidance about its future stance on rate cuts, which it continued to also describe as "gradual".

(Source: Reuters)

• The Massy Group announced on February 3 that it signed a share purchase agreement with Caribbean Distribution Partners Limited (CDP) for the sale of 100% of the shareholding of Massy Distribution (Jamaica) Limited.
• “We believe that achieving success in Jamaica requires a fully integrated approach, with a combination of distribution and manufacturing and/or retail. While we have established a strong distribution presence in the market, the absence of at least one of the other two components, we believe limits our ability to develop the business to its fullest potential,” the group said.
• The group expects that Caribbean Distribution Partners, will build on the strong foundation established by the Massy Distribution (Jamaica) Ltd team and that this transition will bring even greater success to employees, partners, and customers.
• Jamaica remains a key market for the Massy Group, “and we are committed to its growth and development. Our US$140.5Mn IGL acquisition in 2023 is the Group’s largest to date and demonstrates our confidence in the country’s economic and people potential. We will continue to actively participate and invest in Jamaica, either through our business on the ground or through our local partnerships, serving communities across the island.”
• The Caribbean Distribution Partners (CDP) is a group of consumer products companies with a strong presence in the Caribbean. CDP is a joint venture company formed by Agostini’s Ltd (50%), based in Trinidad, and Goddard Enterprises Ltd (50%), based in Barbados. It is the holding company for the group’s consumer products companies.

(Source: Trinidad and Tobago Newsday)

• After almost a decade of fiscal restructuring, Jamaica is on a path to achieving a debt-to-gross domestic product (GDP) ratio of below 70% by the end of the 2024/25 fiscal year.
• Minister of Finance and the Public Service, Hon. Fayval Williams, made the disclosure while addressing members of the diaspora during the recent ‘Let’s Connect with Ambassador Marks’ virtual discussion session.
• “We have managed, as a country, to reduce our debt-to-GDP from the highest it got from 147%. Now we are expected to close this fiscal year at the end of March 2025 at below 70%. Coming from 147% to 70% in less than a decade is a remarkable achievement,” the Minister said.
• Jamaica’s transformation from debt restructuring to a model of fiscal stability makes it an attractive destination for investment. Minister Williams noted that while the country’s credit rating is considered below investment grade, the outlook is positive. “Jamaica is an example of economic stability and responsibility,” she noted.
• “International institutions have looked on Jamaica, they have looked at our debt reduction, tax reform, our monetary stability and have publicly given us passing grades. It was only last year that the rating agencies, after doing their analysis on Jamaica, raised their ratings on us. Currently we are just below investment grade rating and, of course, we have our sights on attaining investment grade rating,” the Minister added.

(Source: JIS)

• The Dominican Republic’s air transport sector faces high tax costs compared to other countries in Latin America and the Caribbean, affecting its competitiveness.
• According to the Regional Center for Sustainable Economic Strategies (CREES), the country ranks 16th out of 20 in the “Air Transport Competitiveness Index,” particularly due to high ticket sales taxes (18% Tax on the Transfer of Industrialised Goods and Services) and arrival fees.
• Despite ranking third in low airport usage rates, the nation falls behind in other key taxation areas. CREES emphasised that these costs not only impact tourism—one of the country’s economic pillars—but also make air travel more expensive for all passengers, limiting accessibility and international connectivity.
• Experts argue that reducing taxes and fees could attract more visitors and investments while strengthening the country’s position as a regional air hub. Given the sensitivity of the air market to costs, even small adjustments could significantly boost demand, benefiting tourism and strategic economic sectors.

(Source: Dominican Today)

• The Confederation of Regional Business Chambers (CRBC) met with Finance Minister of Trinidad and Tobago (T&T) Colm Imbert and high on the agenda was the ongoing issue of the foreign exchange shortage that is mainly affecting the Small and medium-sized enterprises (SME) sector.
• “Generally, the discussion went to the cut in credit card expenditures when it comes to US dollars. How does that impacts the supply of forex? What was also discussed was how best the government and the Central Bank can work together with input from chambers to assist in how forex is distributed within the commercial banks,” CRBC’s chairman, Vivek Charran. explained.
• Then, he said many chamber heads indicated that this challenge would cause a domino effect as if the small businesses, especially retail businesses, do not have access to enough forex, particularly those that have financial liabilities in the bank, there can be foreclosure, which will force the establishment to close its doors.
• “The banks themselves don't see how the businesses can continue if they can't generate enough local revenue because they can't get forex to stock their shelves. The bank will calculate it based on their risk, which is better they foreclose on the collateral rather than continue to support a business that can't go anywhere or can't earn any revenue to offset their liabilities,” he detailed.
• In turn, Minister Imbert told the chambers present that his ministry will be looking at how best it can create a facility, whereby the monies injected into the banking system can be used specifically among other bodies, where there can be a specific amount set aside for SMEs. He told CRBC to write to his ministry team about the issues discussed.
• Also, Charran noted the chambers suggested that when foreigners enter the country to buy things, they can be allowed to pay in the US, instead of the hassle of going to the bank and purchasing TT dollars.
• Another suggestion that was put forward by the CRBC head was to work with the Chinese Embassy, to get a Chinese currency fund, that businesses can access to purchase goods from China, and ease up the burden of using US currency.

(Source: Trinidad and Tobago Guardian)

• U.S. services sector activity unexpectedly slowed in January amid cooling demand, helping to curb price growth. The Institute for Supply Management (ISM) said on Wednesday its nonmanufacturing purchasing managers index (PMI) slipped to 52.8 last month from 54.0 in December. Economists polled by Reuters had forecast the services PMI edging up to 54.3.
• A PMI reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of the economy. The ISM associates a PMI reading above 49 over time with expansion in the overall economy. Domestic demand was strong in the fourth quarter, fueled by robust consumer spending.
• The ISM survey's new orders measure fell to 51.3 from 54.4 in December. That helped to pull down its gauge of prices paid for services inputs to 60.4 from 64.4 in December, which was the highest reading since February 2023.
• That is a hopeful sign of progress bringing inflation down to the Federal Reserve's 2% target stalled in recent months. The outlook for inflation is, however, uncertain as President Donald Trump's administration pursues tariffs against the United States' trade partners and mass deportations, actions that economists have warned would raise prices for Americans.
• The survey's measure of services employment increased to 52.3 last month from 51.3 in December. It has not been a good predictor of services payrolls in the government's closely watched employment report, which is scheduled to be released on Friday. Nonfarm payrolls likely increased by 170,000 jobs in January after surging 256,000 in December, a Reuters survey showed. The unemployment rate is forecast to be unchanged at 4.1%.

(Source: Reuters)