• The Dominican Republic continues to shatter tourism records, with a staggering 9,082,298 visitors arriving in the country during the first ten months of 2024. October alone saw an influx of 719,849 tourists, further solidifying the nation’s position as a top-tier tourist destination.
• “These results are a testament to the Dominican Republic’s unwavering appeal as a premier tourist destination,” said Minister Collado. “Our diverse offerings, coupled with world-class hospitality, continue to attract visitors from around the globe.”
• The Dominican Republic’s success can be attributed to both air and sea arrivals. Between January and October, the country welcomed 6,984,569 tourists by air, representing a 30% increase compared to 2019, a 20% jump from 2022, and a 7% growth over the previous year. Additionally, cruise ship arrivals reached 2,097,729 during the same period.
• “October was another outstanding month for Dominican tourism,” said Minister Collado. Air arrivals alone reached 554,169, marking a 49% increase compared to 2019, 13% more than 2022, and a 4% growth over the previous year. Cruise ship arrivals also surged to 165,680, representing a 155% increase compared to 2019, 88% over 2022, and 88% compared to last year.
• With these exceptional results, the Dominican Republic is well on its way to surpassing its goal of attracting 11.5Mn visitors by the end of the year. The nation’s thriving tourism industry is not only boosting the economy but also creating numerous job opportunities for locals.

(Source: Dominican Today)

• Earlier this week, the association that represents the interests of some of the most important oil service providers in Mexico asked state company Pemex to pay overdue debts totalling 103.6Bn pesos ($5.1Bn).
• Mexican President Claudia Sheinbaum said on Thursday that the debt burden accumulated by state energy company Pemex with suppliers would be reviewed and various payment mechanisms are being studied and refined.
• Pemex has a financial debt of $97.3Bn and owes service providers another $20.5 billion. Despite efforts to reduce debt under Sheinbaum's predecessor Andres Manuel Lopez Obrador, the company remains one of the world's most indebted energy companies.
• "A review is being carried out, which is normal," President Sheinbaum said during her regular news conference, without giving details.
• Under the six-year administration of Sheinbaum, who took office on Oct. 1, Pemex will seek to maintain average crude oil production of 1.8Mn barrels per day, but its debt burden is making that challenging.

(Source: Reuters)

• Brazil's labour market is posting blockbuster numbers ahead of a central bank rate decision next week, amid bets that the country's rate-setting committee will need to speed up monetary tightening due to inflationary risks.
• Brazil's jobless rate fell to 6.4% in the three months through September, statistics agency IBGE said on Thursday, October 31, below market expectations and marking the second-lowest unemployment level on record.
• The jobless rate was down from 6.9% in the April through June period and from 7.7% a year earlier, according to IBGE (the Brazilian Institute of Geography and Statistics). Economists polled by Reuters had projected an unemployment rate of 6.5%. That comes after data released on Wednesday showed that Latin America's largest economy created a net 247,818 formal jobs in September, the most since February and above analysts' estimates of a net 227,600.
• However, the fact that Brazil's jobless rate has been hovering around historically low levels, and that job creation keeps surprising to the upside, is fueling market fears that the tight labour market could trigger inflationary pressures.
• "This improvement takes place in a delicate macroeconomic environment, where inflation and the cost of credit may require a more intense response from the central bank in adjustments to the interest rate," Jefferson Laatus, chief strategist at Laatus Group, said. "Especially if the increase in the number of workers puts pressure on consumption and makes controlling inflation difficult."
• Last month, the central bank hiked its interest rate for the first time in more than two years, delivering a 25 basis-point increase of 10.75%.
• Market participants have fully priced in an acceleration in monetary tightening, with a 96% chance of a 50 basis-point increase at the central bank's rate-setting committee's meeting on November 6. The remaining 4% probability is of an even larger increase of 75 basis points.

(Source: Reuters)

• Barbados Prime Minister, Mia Mottley, has welcomed her country's inclusion in this year's Global Innovation Index (GII), eight years after it had been listed in the publication that ranks world economies according to their innovation capabilities.
• 'For the first time in eight years Barbados is included in this important index, which serves to identify the progress countries have made in creating a culture of innovation, highlights the levers that must be pulled to further transform, and allows us to measure what matters,' Mottley said in a video message to the unveiling of the 17th edition by the World Intellectual Property Organisation (WIPO), the Geneva-based international agency focused on global intellectual property issues.
• Mottley said: 'As a small island developing state on the frontlines of the climate crisis, and incredibly sensitive to the impact of geopolitical and economic shocks, we in Barbados and the wider global majority are by our very nature innovative.'
• Prime Minister Mottley said her government is committed to investing in its people, noting that 'we are committed to building the kind of education, business and investment ecosystem that will make the small size of our land space almost irrelevant. 'As we invest in our people, our potential for transformative growth becomes endless, [and] one of the most important areas of investment for Barbados has indeed, always been education,' she said.
• Barbados ranked 77th among the 133 economies featured in the Global Innovation Index (GII) 024, with Switzerland, Sweden, the United States, Singapore, and the United Kingdom, ranked as the world's most innovative economies.
• Barbados's ranking is considered impressive, given the gathering of the necessary statistical data, which began a few months ago. It was noted that Barbados performed above regional and Latin American countries (Jamaica – 79^th, Panama – 82^nd, the Dominican Republic – 97^th, and Trinidad and Tobago – 108^th) in the indicators of institutions, human capital and research, business sophistication, knowledge, and technology outputs.

(Sources: Trinidad Express Newspaper & NCBCM Research)

• China's central bank on Tuesday unveiled its biggest stimulus since the pandemic to pull the economy out of its deflationary funk and back towards the government's growth target, but analysts warned more fiscal help was vital to hit these goals.
• The broader-than-expected package, offering more funding and interest rate cuts, marks the latest attempt by policymakers to restore confidence in the world's second-largest economy after a slew of disappointing data raised concerns of a prolonged structural slowdown.
• However, analysts questioned how productive the People's Bank of China's (PBOC) liquidity injections would be, given extremely weak credit demand from businesses and consumers, and noted the absence of any policies aimed at supporting real economic activity.
• Governor Pan Gongsheng told a news conference the central bank will soon cut the amount of cash that banks must hold as reserves - known as reserve requirement ratios (RRR) - by 50 basis points (bps), freeing up about 1 trillion yuan ($142 billion) for new lending.
• Depending on the market liquidity situation later this year, the RRR may be further lowered by 0.25-0.5 percentage points, Pan said in rare forward-looking remarks. The PBOC will also cut the seven-day reverse repo rate, its new benchmark, by 0.2 percentage points to 1.5%, as well as other interest rates.

(Source: Reuters)

• U.S. private employers hired the fewest number of workers in 3-1/2-years in August and data for the prior month was revised lower, potentially hinting at a sharp labor market slowdown.
• Private payrolls increased by 99,000 jobs last month, the smallest gain since January 2021, after rising by a downwardly revised 111,000 in July, the ADP National Employment Report showed on Thursday. Economists polled by Reuters had forecast private employment would increase by 145,000 positions after a previously reported gain of 122,000.
• The ADP report, jointly developed with the Stanford Digital Economy Lab, was published ahead of Friday's more comprehensive and closely watched employment report for August from the Labor Department's Bureau of Labor Statistics. Initial prints have mostly understated private payroll growth this year.
• Private payrolls likely increased by 139,000 jobs in August after rising by 97,000 in July, according to a Reuters survey of economists. With solid gains in government employment expected, nonfarm payrolls, which refer to the number of jobs in the private sector and government agencies, are forecast to have increased by 160,000 last month after advancing by 114,000 in July.

(Source: Reuters)

• Driven by strong revenue growth from its expanded operations, Future Energy Source Company Limited (FESCO) recorded a net profit of $148.37Mn for the three months ending June 2024, a 28.2% increase relative to the first quarter of 2023.
• Revenues grew 18.6% year over year to $7.78Bn, supported primarily by higher prices and an increase in the quantity of fuel sold. As a price taker with no control over fuel supply prices, Fesco’s revenue growth was boosted by the overall year-over-year (YOY) increase in gasoline prices. (87 Octane: +J$6.08, 90 Octane: +J$9.12, ADO +J$1.06 and USLD -J$0.91).
• Cost of sales grew by 17.6% to $7.37Bn, reflecting both high ex-refinery prices for gasoline and the increase in volumes. However, with revenue growth outpacing the growth in costs, gross profit increased by 38.7% from $297.22Mn to $412.28Mn, which translated into a slight 0.77pp increase in gross profit margin. The improvement in gross profit reflects both increasing throughput (measured in litres of fuel sold) and diversification of product offerings (fuel types including LPG) and services (increased retail presence).
• Spurred largely by the addition of FESCO Kitson Town, FESCO Hayes, FESGAS Bernard Lodge, and FESGAS Naggo Head, Operating and Administrative Expenses grew 65.8% to $226.47Mn. Early-stage expenses related to new business ventures- such as business acquisition, property acquisition and development costs, and business integration costs- also contributed to the increase.
• Despite higher operating expenses, operating profit increased 16.3% to $185.81Mn when compared to the $159.79Mn in the prior period. Overall, this resulted in a marginal 5 basis points decline in operating profit margin for the quarter.
• Looking ahead, FESCO has commenced construction of its service station on Spanish Town Road, FESCO Oval, as it executes its strategy to increase its retail presence within the Kingston and St Andrew (KSA) region. Completion will take approximately fifteen (15) months, with opening anticipated in September 2025. The company plans to continue making investments in real assets and equipment to support expanding its service station businesses and network, its industrial client base, and LPG business.
• FESCO’s stock price has decreased by 13.84% since the start of the calendar year, closing Wednesday’s trading session at $3.30. It currently trades at a P/E of 19.1x, which is slightly above the Junior Market Distribution Sector Average of 18.7x.

(Sources: JSE, Company Financials & NCBCM Research)

• The Global Services Sector (GSS) continues to be a major employment driver in the local economy, with a 61.5% increase in the number of jobs created over eight years.
• Minister of Industry, Investment and Commerce, Senator the Hon. Aubyn Hill, said that 52,000 persons are now employed in the sector, moving from 32,000 in 2016, as he addressed the Global Services Association of Jamaica (GSAJ) Conference and Awards Ceremony held recently at The Jamaica Pegasus hotel in New Kingston.
• The conference, themed 'Forward Thinking…What Lies Ahead', convened stakeholders from the BPO sector, both local and international, for meaningful dialogue, the exchange of innovative ideas, and to acknowledge the exceptional contributions of individuals and organizations in the field.
• Minister Hill said that the sector has been making a major contribution to the economy and also noted that the Government had developed a national five-year strategy to position the country to further capitalise on the growth in demand for services. He also stated that global industry trends indicate substantial demand for BPO, knowledge process outsourcing (KPO), and information technology outsourcing (ITO) services, with forecast revenue growth of 9.1%, 18.4%, and 7.7%, respectively.
• President of the GSAJ, Anand Biradar, said that while the industry has performed well, more needs to be done to create a premium service experience across all sectors. “To charge a high premium, we must deliver the highest possible imaginable service experience, not just within the walls of a specific entity but across the country,” he highlighted
• The GSAJ represents the outsourcing industry and information and communications technology (ICT) companies doing business in Jamaica. Its mandate is to lobby the Government on behalf of the ICT-BPO operators to improve the operating and regulatory environment, assist member companies by representing their interests, create competitive advantages and promote the outsourcing sector in Jamaica, the region and the world.

(Source: JIS)

• Consumer prices rose 0.5% in May 2024, with the All Jamaica Consumer Price Index (CPI) rising to 134.9 from 134.2 in April.
• The main contributor to this movement was a 1.1% increase in the index for the heaviest weighted division, ‘Food and Non-Alcoholic Beverages’. The index for the class ‘Vegetables, tubers, plantains, cooking bananas and pulses’ rose 5.2% during the month on the back of higher prices for some agricultural produce, primarily vegetables, due to lower supplies resulting from dry weather conditions.
• The inflation rate was also impacted by a 0.6% increase in the index for the ‘Housing, Water, Electricity, Gas and Other Fuels’ division, which was largely influenced by higher electricity rates. However, the overall rate of inflation was tempered by a 0.1% fall in the index for the ‘Transport’ division due to lower petrol prices.
• Despite the increase in the CPI in May point-to-point inflation rate (May 2023 – May 2024) was 5.2%. This was 0.1 percentage point lower than the 5.3% recorded for April 2023 to April 2024. The divisions making the largest contribution to the point-to-point inflation rate were ‘Food and Non-Alcoholic Beverages’ (3.9%), ‘Transport’ (9.7%) and ‘Housing, Water, Electricity, Gas and Other Fuels’ (3.8%). The calendar year–to-date inflation rate as of May 2024 was -1.3%.
• At its last monetary policy meeting in May, the BOJ kept its policy rate at 7.00% as it continued to monitor the pass-through effects of previous adjustments on deposit and loan rates. The next policy decision will be on the 28th of June, when it is expected that BOJ will maintain its policy rate at 7.00%.
• While inflation has fallen over the last four months, farmers are still grappling with drought conditions. If these conditions persist, it may continue to put upward pressure on food prices, the largest component in the CPI basket.

(Sources: STATIN and NCBCM Research)

• Peru's gross domestic product expanded 5.28% in April from a year earlier, the government's INEI (Peru's National Institute of Statistics and Information; INEI, for its acronym in Spanish) statistics agency noted, the highest rate in 32 months.
• The figure reversed the contraction logged in the prior month and was well above the 1.4% growth predicted by analysts polled by Reuters, also coming above government expectations of a 4% increase.
• April's expansion was supported mainly by a year-on-year increase of nearly 24% in agriculture and livestock production and an expansion of 11.4% in the manufacturing sector, official data showed.
• The growth rate increase, the highest since September 2021, comes as Peru's government boosted its public spending by 29% between January and May, the economy ministry said in a press release explaining the GDP data.
• "Economic activity is expected to remain dynamic in May, mainly driven by fishing and primary manufacturing given the extraordinary anchovy capture in the north-central zone," the document added.

 (Source: Reuters)