• In an extraordinary session on Monday, September 15, 2025, the Senate of the Dominican Republic urgently approved an amendment to Law 90-24, allowing the Executive Branch to issue and place public debt securities. The amendment raised the public debt ceiling to RD$361.618 billion, adding over RD$10 billion to the previously authorised limit. 
• Law 90-24 established the fiscal rule and was approved by Congress in July 2024. It established a real expenditure growth cap of 3% (7% in nominal terms) and a debt anchor of 40% of GDP by 2035.
• The Government, through President Luis Abinader, justified the measure as part of a fiscal policy "counter-cyclical" aimed at mitigating the effects of the international situation, boosting the economy and guaranteeing sustainability in public finances.
• The amendment raises the debt ceiling from RD$350Bn to RD$361.618Bn, adding over RD$10Bn to the previously authorised limit. Despite intense debate and opposition from Senator Edward Espíritusanto, who criticised the measure as “financial improvisation” and a growing reliance on debt, the bill passed with a majority vote.
• Currently, the Dominican Republic’s fiscal strength reflects improvements in fiscal deficit and debt trends since the pandemic. However, it still faces a shallow revenue base and high exposure to foreign-currency borrowing, which contributes to weaker debt affordability metrics relative to peers. The sovereign debt level in absolute terms and interest burdens are high relative to government revenue.
• That said, the share of foreign currency debt continues to decline gradually, through greater issuance of global peso-linked bonds in recent years.

(Sources: Dominican Today, Moody’s Investors Service & Fitch Ratings)

• The Federal Reserve (Fed) cut interest rates by a quarter of a percentage point on Wednesday and indicated it will steadily lower borrowing costs for the rest of this year, as policymakers responded to concerns about weakness in the job market in a move that won support from most of President Donald Trump's central bank appointees. Only new Governor Stephen Miran, dissented in favour of a half-percentage-point cut.
• The rate cut, along with projections showing that two more quarter-percentage-point reductions are anticipated at the remaining two policy meetings this year, indicates Fed officials have begun to downplay the risk that the administration's voluble trade policies will stoke persistent inflation, and are now more concerned about weakening growth and the likelihood of rising unemployment. The cut, the first move by the policy-setting Federal Open Market Committee since December, lowered the policy rate to the 4.00%-4.25% range.
• In a press conference after the conclusion of the Fed meeting, Chair Jerome Powell said, "In the near term, risks to inflation are tilted to the upside and risks to employment to the downside, a challenging situation" for monetary policymakers. He added, "labour demand has softened, and the recent pace of job creation appears to be running below the break-even rate needed to hold the unemployment rate constant," noting "the marked slowing in both the supply and demand for workers is unusual."
• New economic projections showed policymakers still see inflation ending this year at 3%, well above the central bank's 2% target, a projection unchanged from the last set of forecasts in June. The projection for unemployment was also unchanged at 4.5% and the one for economic growth was slightly higher at 1.6% versus 1.4%.

(Source: Reuters)

• The Bank of Canada reduced its key policy rate to a three-year low of 2.5% on Wednesday, the first cut in six months, and said it would be ready to cut again if risks to the economy increased in the coming months.
• The 25-basis-point cut reflected a weak jobs market and less concern about underlying pressures on inflation, the bank said. It paused its easing campaign in March after reducing rates by a total of 225 basis points in nine months, starting in June last year.
• Bank of Canada Governor Tiff Macklem said the damaging effect of U.S. tariffs meant considerable uncertainty remained. "But with a weaker economy and less upside risk to inflation, Governing Council judged that a reduction in the policy rate was appropriate to better balance the risks going forward," he said in opening remarks to reporters.
• The cut was a unanimous decision of the seven-member Governing Council, Macklem said. The last time the key rate hit 2.50% was in July 2022. The economy initially held up reasonably well in the face of tariffs in some critical sectors. But in the last two months, the job market has slumped, losing more than 100,000 positions. The unemployment rate is at a nine-year high, excluding the COVID-19 pandemic years.
• The bank's next rate announcement is on October 29, followed by another one in December. While economists are widely expecting another rate cut before the end of the year, money markets are not factoring in more easing in 2025.

(Source: Reuters)

• Weighed down by a falloff in earnings and higher operating expenses, Marketing & Advertising Agency, The Limners and Bards Limited (LAB) posted lower earnings attributable to shareholders for the three months ended July 31, 2025 (Q3 2025),
• Total revenues fell 13.0% year over year (YoY) to J$267.14Mn. The lower revenue outturn was accompanied by an 18.6% YoY decline in direct costs to J$165.38Mn. With direct costs contracting at a faster pace than revenues, gross profit margin improved to 38.1% in Q3 2025, up 4.2 percentage points from 33.9% in Q3 2024.
• However, total operating expenses rose by 10.5% during the quarter, driven by higher Administrative (+9.4%) and Selling & Distribution (+289.7%) costs. This pressured profitability, with operating profit falling 25.3% YoY to J$22.33Mn. Ultimately, net profit declined 36.5% to J$21.69 million, down from J$34.13 million in the prior-year quarter.
• The Q3 earnings performance, along with weak earnings from the start of the financial year, contributed to the company’s nine-month results (9M 2025), plummeting 49.4% to J$42.3 million year over year. Management attributed the weaker showing primarily to elevated operating costs tied to strategic hires in business development, content creation, and client service, as well as facility upgrades. These investments, while dampening short-term earnings, are expected to bolster long-term growth potential.
• Looking ahead, management is aiming to stabilise short-term performance while laying the groundwork for sustainable growth. Its strategy is focused on diversifying beyond traditional advertising into digital-first services, influencer and user-generated content solutions, and content ownership through its “Five in 25” film slate. The company also noted growing traction in overseas markets, which now contribute 9% of total revenues. Meanwhile, it is seeking to contain operating costs through smarter resourcing, while protecting growth-focused investments, and embedding technology and flexible talent models to enhance efficiency, speed turnaround times, and strengthen competitiveness.
• LAB’s stock price has declined by 29.6% year-to-date, closing at $0.98 as of Tuesday. At this price, the stock is trading at a P/E ratio of 25.8x, which is above the Junior Market Sector average of 22.1x.

(Sources: The LAB Ltd. Unaudited Earnings Release & NCBCM Research)

• Lumber Depot Limited (LUMBER) reported net profit of J$37.93Mn, for the first quarter ended July 31, 2025 (Q1 2025), reflecting a 16.1% year-over-year (YoY) decline. This was primarily due to the introduction of an income tax charge following the company’s transition from the JSE Junior Market tax exemption regime.
• Revenues grew 3.9% YoY to close at J$401.54Mn, driven by steady demand in its Papine hardware operations. However, sales were skewed toward basic construction commodities and accompanied by continued price competitiveness, which tempered revenue growth.
• Direct expenses also rose by 6.1%, outpacing revenue growth. As a result, gross profit slipped 3.1% to J$89.23 million, while gross profit margin declined by 16 basis points to 22.2%.
• That said, operating expenses were contained (-4.9%), allowing the company to deliver an operating profit of J$44.23Mn, which was relatively flat compared to Q1 2024 J$44.68Mn.
• However, with the expiration of its five-year 100% tax remission in December 2024, the company has income tax expense, which it did not incur in the prior year. Consequently, LAB incurred J$5.42Mn in income tax during the quarter. This new tax charge weighed on the bottom line and drove the 16.1% YoY decline in net profit.
• Management noted that the company continues to maintain a strong market presence in Papine, supported by its owned facility and high community traffic. It is also actively exploring expansion opportunities, including investment in adjacent properties to broaden its footprint. If successful, it would allow the company to expand its operations to better serve its market, with the potential for improved earnings.
• Lumber’s stock price increased by 1.1% year-to-date, closing at $2.76 on September 16th.

(Sources: Lumber Depot Ltd. Unaudited Earnings Release & NCBCM Research)

• Trinidad and Tobago's (T&T) energy sector could face growing challenges in the coming years as the global liquefied natural gas (LNG) market heads toward oversupply, the Energy Chamber of T&T has warned. The warning comes in the wake of recent statements by TotalEnergies CEO Patrick Pouyanné.
• While demand for natural gas is projected to rise by more than 20% by 2050 compared with 2024, Pouyanné cautioned that the rapid expansion of LNG capacity, particularly in the US, Qatar, and Canada, could push global prices down. 'There is a point where we'll face some oversupply,' Pouyanné said, highlighting the potential challenges for producers even as lower prices benefit consumers. Pouyanné also noted that lower LNG prices could make the fuel competitive with the price of coal in key growth markets, including China, potentially triggering a shift from coal and diesel to natural gas. This transition could establish a foundational long-term demand base, supporting future supply cycles.
• The Energy Chamber said the potential future decline in LNG prices raises key considerations for a country like T&T, where short-term prices of energy commodities have a direct relation to the revenue earned by the government through taxes and other revenue. 'LNG is Trinidad and Tobago's major export and source of foreign exchange. Since the Russian invasion of Ukraine and Europe's moves to stop imports of Russian pipeline gas, LNG prices in both Europe and Asia have been at historically high levels. European and East Asian LNG import prices are currently over US$11.00 per mmsf compared to the US Henry Hub benchmark price of under US$3,' it stated.
• The renegotiated Atlantic marketing arrangements mean that Trinidad & Tobago's wellhead gas prices reflect these high Asian and European LNG prices; however, future LNG price decreases could put further strain on government revenue and foreign exchange earnings. This potential for declining LNG prices highlights the importance of a national policy where there is a range of different export routes for natural gas, rather than relying solely on LNG.
• 'Maintaining a portfolio of different routes to monetise gas is an important strategic national policy consideration, underlining the importance of ensuring that there is a diversity of downstream gas processing facilities in the country, including petrochemicals such as methanol and ammonia. This means that there is a broader portfolio of export commodities and potentially provides some greater stability in export earnings and government revenue,' the Energy Chamber stated.

(Source: Trinidad Express Newspapers)

• U.S. retail sales rose more than expected in August as consumers purchased a range of goods and dined out, though a weakening labour market and rising prices linked to tariffs pose downside risks to sustained spending.
• Retail sales climbed 0.6% last month after an upwardly revised 0.6% gain in July, according to the U.S. Department of Commerce. Economists polled by Reuters had forecast a 0.2% rise following a previously reported 0.5% July increase. Sales were up 5.0% year-over-year. Adjusted for inflation, economists estimated monthly sales rose only 0.2%.
• The Trump administration had argued tariffs would be absorbed by exporting countries, but data show otherwise, with signs pointing to faster inflation ahead. A separate report from the U.S. Bureau of Labour Statistics showed import prices rose for a second consecutive month in August, driven by higher costs for consumer goods, capital goods, and motor vehicles.
• “The lack of any substantial decline in import prices given the surge in the effective tariff rate to roughly 15–16% suggests that those additional costs are being borne nearly entirely by U.S. businesses and consumers,” said Michael Hanson, an economist at J.P. Morgan.
• Meanwhile, the labour market continues to struggle, marked by meagre job gains and rising unemployment as companies hold off on hiring amid an uncertain economic outlook, posing a risk to consumer spending.
• Still, the third straight month of solid sales gains is unlikely to stop the Federal Reserve from cutting interest rates on Wednesday, given widening cracks in the labour market. It may, however, temper the case for more aggressive cuts, economists said.
• The U.S. central bank is expected to deliver a quarter-point rate cut on Wednesday to support the labour market. The Fed had paused its easing cycle in January amid uncertainty about the inflationary impact of import duties.

(Source: Reuters)

• China's factory output and retail sales reported their weakest growth since last year in August, keeping pressure on Beijing to roll out more stimulus to fend off a sharp slowdown in the world's second-largest economy.
• The disappointing data split economists over whether policymakers would need more near-term fiscal support to hit their annual growth target of "around 5%," with manufacturers awaiting more clarity on a U.S. trade deal and domestic demand curbed by a wobbly job market and property crisis.
• Industrial output grew 5.2% year-on-year, National Bureau of Statistics data showed on Monday, the lowest reading since August 2024 and weaker than a 5.7% rise in July. Retail sales, a gauge of consumption, expanded 3.4% in August, the slowest pace since November 2024, and cooled from a 3.7% rise in the previous month. They missed a forecast gain of 3.9%.
• "The strong start to the year still keeps this year's growth targets within reach, but similar to where we were at this time last year, further stimulus support could be needed to ensure a strong finish to the year," said Lynn Song, chief economist, Greater China at ING.
• "While it is too early to gauge the impact of the consumer loan subsidies coming into effect in September, it is likely that more policy support is still needed, given the broader slowdown across the board. We continue to see a high possibility for another 10bp rate cut and 50bp RRR cut in the coming weeks."
• Authorities are leaning on manufacturers to find new markets to offset U.S. President Donald Trump’s unpredictable trade policy and weak consumer spending. However, a separate data this month showed factory owners have had some success diverting U.S.-bound shipments to Southeast Asia, Africa and Latin America, but the drag from the property crisis continues to offset efforts to steady the economy.
• Zhaopeng Xing, senior China strategist at ANZ, said that while the data showed momentum in the world's second-largest economy was weakening, it was not yet bad enough to trigger a new round of stimulus. "Policies and measures to support service consumption are expected to offset the impact of aggregate demand this month," he said, adding an official crackdown on firms aggressively cutting prices made domestic demand appear worse than it was.

(Source: Reuters)

• For the three months ended July 31, 2025 (Q1 2025/2026), Pharmaceutical Distributor, R.A. Williams Distributors Limited (RAWILL) reported a net loss of J$1.91Mn a sharp deterioration from a net profit of J$24.06Mn in Q1 2024/2025, owing to higher operating expenses.
• Total revenues rose 7.6% YoY to J$417.0Mn, supported by stronger demand and the successful integration of new pharmaceutical product lines. The late-2024 integration of Iracet^[1] and six other new products has positioned R.A. Williams for stronger revenue generation heading into FY2025/26.
• However, this did not translate to the bottom line due to brisk growth in direct and indirect costs, which eroded margins. Direct costs increased by 16.0% to J$228.8Mn, outpacing the growth in revenues. Consequently, the gross profit margin dipped 3.9 percentage points to 45.1%. Operating profit fell sharply to J$15.2Mn from J$48.2Mn in Q1 2024, weighed down by administrative expenses (+17.6%) and selling & distribution costs (+29.4%), both linked to the company’s wider scale of operations.
• That said, finance costs improved during the quarter to J$17.09Mn (down 13.3%) relative to J$19.72Mn in Q1 2024/2025, reflecting lower debt service costs.
• Despite topline growth and lower finance costs, the bottom line was negatively impacted, registering a 107.9% decline.
• Management highlighted portfolio expansion with the onboarding of Ryvis Pharma and new anti-fungal products, alongside continued investments in distribution scale and community initiatives. These are expected to strengthen future revenue growth, though execution will carry near-term cost pressures.
• RAWILL’s stock price declined by 50.7% year-to-date, closing at $0.37 as at Tuesday, September 16, 2025. 

(Sources: RAWILL Ltd & NCBCM Research)

^[1] The first and only generic alternative to the brand Keppra available in Jamaica. Keppra is an epilepsy medicine.

• Despite a slight increase in consumer prices for August, the Point to Point (P2P) inflation rate was 1.2%. This was 2.1% percentage points lower than the 3.3% recorded for July 2024 to July 2025.
• The divisions making the largest contribution to the point-to-point inflation rate were ‘Restaurant and Accommodation Services’ (+5.2%), ‘Education’ (+9.8%), and ‘Information and Communication’ (-5.8%).
• Consumer prices rose 0.3% in August 2025, with the All-Jamaica Consumer Price Index (CPI) increasing from 142.0 in July to 142.4 in August. The monthly increase was driven mainly by a 0.8% rise in the index for the ‘Food and Non-Alcoholic Beverages’ division. Within this division, the index for ‘Food’ rose 0.9%, reflecting higher prices for fresh produce. The 0.9 per cent increase in the index for the ‘Recreation, Sport and Culture’ division, due to increased prices for textbooks and stationery.
• Calendar year-to-date (YTD) inflation rate as at August 2025 was -0.8%, well below the calendar YTD rate of 2.9% for August 2024.
• With inflation falling further below the BOJ’s target band, conditions remain favourable for the central bank to accelerate monetary easing to stimulate domestic demand. Of note, despite inflation being below its target range, the Bank of Jamaica (BOJ) kept the policy rate unchanged at 5.75% its last meeting in August, citing global uncertainties. It also projected that near-term inflation readings are expected to remain below the lower bound due to cheaper electricity and stronger agricultural output, before gradually rising toward the midpoint. However, the sharp decline in P2P in August may heighten market expectations for a rate cut at the upcoming September 29 meeting.

(Sources: STATIN, Bank of Jamaica & NCBCM Research)