• 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)

• U.S. Treasury yields will plateau over the coming three months and then only fall modestly by year-end amid receding expectations of Federal Reserve interest rate cuts, according to a Reuters poll of bond strategists. After peaking at 5.02% in October, the benchmark U.S. 10-year Treasury note yield plummeted over 120 basis points (bps) as traders priced in as much as 150 bps of Fed rate cuts this year.
• Mostly strong U.S. economic data and inflation still higher than the Fed's target have pushed financial markets to limit those expectations to only two 25-bp rate reductions this year, starting September. Economists in a separate Reuters survey shared that view, saying there was a considerable risk of only one or even no rate cuts in 2024.
• That repricing in interest rate futures has caused the yield to bounce back up to 4.44%, though the path has been volatile - traversing a near-40 bps range in just the last two weeks. The U.S. 10-year note yield, seen roughly steady at 4.35% at end-August, is then forecast to decline to 4.23% and 4.13% in six and 12 months respectively, according to median forecasts from 55 fixed-income strategists and analysts in a June 6-11 Reuters poll.
• "For yields, we think it's choppier sideways and then lower towards the end of the year. We're still in the camp of inflation pressures easing and eventual Fed rate cuts - one or two - by year-end," said Kathy Jones, chief fixed income strategist for the Schwab Center for Financial Research.
• Much of the direction of yields over coming months will depend on messaging from the central bank's policy-setting meeting on Wednesday, with updated economic projections expected to show fewer rate cuts than anticipated in March.

(Source: Reuters)

• All major benchmarks the Inter-American Development Bank (IDB) established under the Public Sector Transformation Programme have been met.
• Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, disclosed while delivering the main address at the Caribbean Public Sector Financial Management Conference in Kingston on May 22. “The Public Sector Transformation Programme is the first project between the IDB and the Government of Jamaica where all of the metrics specified by the IDB at the outset of that loan have been achieved. It has not been easy, but we have gotten it done,” he said.
• The pact to support Jamaica in its public-sector transformation was established with the IDB six years prior. "They supplied both funding and technical expertise to accomplish this within a set timeframe," Dr. Clarke noted.
• The main objective of the programme was to improve the delivery of services in Jamaica by enhancing the quality of public services and enhancing efficiency in public spending. Focus was placed on information and communications technology, human resource management, rationalisation of public bodies, shared services in the public sector and compensation restructuring and overhaul. 
• The Caribbean Public Sector Financial Management Conference was hosted by the Ministry of Finance and the Public Service in partnership with the Association of Chartered Accountants (ACCA) and in collaboration with the Institute of Chartered Accountants (ICAJ).
• It was geared at increasing public awareness of financial management within the public sector to promote accountability, transparency, and good governance and was held at The Jamaica Pegasus Hotel in Kingston.

(Source:  JIS)

• United Oil & Gas Plc, the oil and gas company with a high-impact exploration asset in Jamaica and a development asset in the UK, is pleased to announce that Iman Hill, United's Non-Executive Director, has agreed to provide consultancy services to support the progress of the Jamaican project.
• Iman is a highly experienced Petroleum Engineer and has been working in the oil and gas industry for over 30 years.  She has extensive global expertise in both the technical and commercial aspects of the petroleum business, which includes field development, capital projects, commercial negotiations, farm-outs and production operations.
• Iman’s experience spans the Middle East, North and West Africa, South America, the Far East, and the North Sea. She has worked in diverse settings from onshore to ultra-deep water with companies like BP, Shell, BG Group and Dana Gas. In addition to her role as Technical Director, GM UAE and President Egypt, she also ran one of the Egyptian joint ventures as Managing Director and Board member of the Egyptian Bahraini Gas Derivatives Company.
• United Oil’s Chief Executive Officer, Brian Larkin commented: "Iman is a valued member of our board and I am pleased that she has agreed to provide additional support to the Jamaican project during this pivotal phase as we advance our work program and the farm-out process. Iman's extensive experience of farm-outs will greatly benefit the team in the months ahead, and I'm excited to collaborate with her."
• United Oil & Gas has been granted a license by the Jamaican Ministry of Science, Energy, Telecommunications, and Transport (MSETT) to explore oil off-shore Jamaica until Jan. 31, 2026. This license covers 22,400 square kilometers and could contain over 2.4Bn barrels of fuel resource.

(Sources: United Oil & Gas, NCBCM Research)

• Real GDP for the Jamaican economy increased by an estimated 1.7% during the fourth quarter of 2023 compared to the fourth quarter of 2022. This resulted from growth in both the Services and Goods Producing Industries of 2.0% and 8%, respectively.

• All the industries within the Services Industries grew, except for the Producers of Government Services, which declined by 0.4%. There were improved performances in Hotels & Restaurants (8.3%), Transport, Storage & Communication (2.1%), Wholesale & Retail Trade; Repairs; Installation of Machinery & Equipment (1.0%), Other Services (1.1%), Finance & Insurance Services (3.6%), Real Estate, Renting & Business Activities (1.3%) and Electricity & Water Supply (5.2%).
• Growth in the Goods Producing Industries was influenced by higher output levels in the following industries: Agriculture, Forestry & Fishing (2.6%), Manufacturing (0.3%) and Mining & Quarrying (21.5%). The Construction industry, however, declined by 3.8% due to reduced activities in building construction and civil engineering. Lower expenditure on the South Coast Highway Improvement Project was the main contributor to the fall in the civil engineering group.

• Preliminary estimates for 2023 indicate that the Jamaican economy expanded by 2.6% in real terms reflecting growth in both the Services and Goods Producing Industries of 3.0% and 1.6%, respectively. Notably, this estimate is 0.6% higher than the 0% projection from the IMF in October.

(Sources: STATIN)

• The twin-island nation of Antigua and Barbuda has made significant strides in its global ranking, now standing at 54 among 193 countries in the United Nations Human Development Index (HDI). 
• The HDI is a summary measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable, and having a decent standard of living.
• This marks a remarkable climb of 17 places over a relatively short timeframe, from its 2021 rank of 71 and places the country in the “very high” category of the HDI.
• Prime Minister Gaston Browne has hailed this achievement as especially notable in light of the challenges posed by the COVID-19 pandemic.
• “Well, I think it’s an astonishing achievement when you look at the fact that our country’s economy was decimated in 2020 by COVID. We lost 18% of GDP and that we have actually bounced forward to the extent now that the Antigua and Barbuda economy is easily the most vibrant within the Caribbean region, barring Guyana with their recent oil find.”
• In the Caribbean region, Antigua and Barbuda now ranks second, after St Kitts and Nevis at 51. Further to this, Bahamas is ranked at 57, Trinidad at 60, Barbados at 62, and Jamaica at 115.

(Source: Antigua Observer)

• Wigton Windfarm Limited (WIG), along with its joint venture partner, Innovative Energy Company DBA IEC SPEI Limited, entered into a US$ 7.78Mn contract on December 22, 2023 with Montego Bay Jamaica (MBJ) Airports Limited for the design, engineering and installation of roof-mounted and floating solar photovoltaic systems with a capacity of Six Megawatt Alternating Current (6 MWac), along with a Battery Energy Storage System.
• MBJ Airports Limited is the operator of Sangster International Airport, which connects Jamaica with more than 60 international destinations. The Sangster International Airport (SIA) in Montego Bay, St. James, is undergoing significant modernisation designed to transform it into a world-class facility at a cost of approximately US$140Mn. The engagement includes runway extension and civil infrastructure works as well as expansion and redevelopment of SIA’s retail programme.
• Chief Executive Officer of MBJ, Shane Munroe, stated last year that “Eventually, the long-term goal is for Sangster International Airport to be 100 percent powered by renewables, with major investments in solar energy already under way to reduce Jamaica’s dependence on fossil fuels.” These solar powered systems to be supplied by Wigton Windfarm Limited, will be used to reduce the airport’s reliance on the national energy grid.
• Wigton’s primary line of business involves producing wind energy; however, the company has been actively diversifying its business by exploring other alternative energy opportunities in Jamaica and the wider Caribbean. In March 2023, Wigton and Innovative Energy Company Limited (IEC) entered another contract with the Jamaican Ministry of Agriculture and Fisheries for solar power projects valued at over US$7.33Mn.
• This latest US$7.78Mn contract underscores Wigton’s commitment to its diversification strategy as it aims to sustain its operations over the long term. By expanding its energy offerings, this will allow Wigton to generate additional revenues and mitigate against its existing business risk stemming from its reliance on Power Purchase Agreements, set to expire in May 2036, with the Jamaica Public Service Company.

(Sources: JSE & JIS)

• Bulk grain shippers hauling crops from the U.S. Gulf Coast export hub to Asia are sailing longer routes and paying higher freight costs to avoid vessel congestion and record-high transit fees in the drought-hit Panama Canal, traders and analysts said.
• The shipping snarl through one of the world's main maritime trade routes comes at the peak season for U.S. crop exports, and the higher costs are threatening to dent demand for U.S. corn and soy suppliers that have already ceded market share to Brazil in recent years.
• Ships moving crops have faced wait times of up to three weeks to pass through the canal as container vessels and others that sail on more regular schedules are scooping up the few transit slots available. Grain ships are often at the back of the line as they usually seek transit slots only a few days before arriving, while others, like cruise and container ships, book months in advance.
• The restrictions could continue to impede grain shipments well into 2024, when the region's wet season may begin to recharge reservoirs and normalize shipping in April or May, analysts said.
• "It's causing quite a disruption both in expense and delay," said Jay O'Neil, proprietor of HJ O'Neil Commodity Consulting. He added that the disruption is unlike any he's seen in his 50 years of monitoring global shipping. Wait times for bulk grain vessels ballooned from around five to seven days in October to around 20 days by late November, O'Neil said, prompting more grain carriers to reroute.
• While grain prices have fallen from 2020 peaks, higher freight costs will be passed on to grain and oilseed importers who buy human food and livestock feed.

 (Source: Reuters)