• Faced with pressing concerns over the impact tariffs will have on a slowing economy, the rate-setting Federal Open Market Committee kept its key borrowing rate targeted in a range between 4.25%-4.5%, where it has been since December. Markets had been pricing in virtually zero chance of a move at this week’s two-day policy meeting.
• Along with the decision, officials updated their rate and economic projections for this year and through 2027 and altered the pace at which they are reducing bond holdings.
• Despite the uncertain impact of President Donald Trump’s tariffs as well as an ambitious fiscal policy of tax breaks and deregulation, officials said they still see another half percentage point of rate cuts through 2025. The Fed prefers to move in quarter percentage point increments, so that would mean two reductions this year. However, in a news conference, Federal Reserve Chair Jerome Powell said the central bank would be comfortable keeping interest rates elevated if conditions warranted it.
• In its post-meeting statement, the FOMC noted an elevated level of ambiguity surrounding the current climate.
• Powell noted that there had been a “moderation in consumer spending” and anticipates that tariffs could put upward pressure on prices. These trends may have contributed to the committee’s more cautious economic outlook.
• The group downgraded its collective outlook for economic growth and gave a bump higher to its inflation projection. Officials now see the economy accelerating at just a 1.7% pace this year, down 0.4 percentage point from the last projection in December. On inflation, core prices are expected to grow at a 2.8% annual pace, up 0.3 percentage points from the previous estimate.          

(Source: CNBC)

• Japan's government stuck with its cautiously optimistic outlook for the economy; however, U.S. President Donald Trump's trade policies could dampen global growth and higher inflation could hurt consumer spending.
• The government maintained its view on the world's fourth-largest economy, saying it is "recovering moderately" in its monthly report for March, citing strong corporate earnings and wage increases which policymakers hope will boost consumption.
• "There are U.S. trade policies which could have direct and indirect impact on Japan, so we highlighted them as risks to the economy," said an official at the Cabinet Office.
• Referring to Japan's potential trade exposure, the Cabinet Office report said intermediate goods exports including electronic devices account for 60.0% of Japan's goods exports to China. The ratio of intermediate goods such as auto parts in the nation's goods exports to Mexico accounts for 60%, while those to Canada account for nearly 50%, the report said.
• Still, the government retained its assessment on exports, saying they picked up recently for March as Japan's shipments to Asia were on the rise. Higher prices were also risks to the economy as Japan's nationwide overall consumer price index rose 4.0% in January, the highest in two years, boosted by fresh food prices.

(Source: Reuters)

• Approximately 3,000 micro, small and medium-sized enterprises (MSMEs) are poised to benefit from a share of some €9.5Mn in grant-funding support from the European Union (EU). The funds are being provided under the EU’s Digital Transitioning Programme in Jamaica, which was launched in 2023 and aims to increase information and communications technology (ICT) access and use by MSMEs islandwide. This is in keeping with the Government’s ongoing thrust to transition the country to a digital economy.
• Speaking during the official opening of the Jamaica Business Development Corporation (JBDC) Manchester Business Centre in Mandeville recently, Minister of Industry, Investment and Commerce, Senator the Hon. Aubyn Hill, said approximately €1.7Mn of the EU grant is earmarked for the JBDC. He indicated that the provision will fund further digital technology buildout for a targeted 2,700 MSMEs while emphasising the importance of this undertaking and the dividends to be derived.
• Senator Hill noted that the growth recorded by several of Jamaica’s major corporations and enterprises was largely driven by their embracement of technology and encouraged MSMEs to do likewise. He also reminded entrepreneurs that they were operating in an era where digital adoption is an absolute imperative, hence the decision to incorporate agencies such as the JBDC to lend support in driving this thrust.
• Meanwhile, Programme Manager, EU Delegation to Jamaica, Turks & Caicos, The Bahamas, Belize and the Cayman Islands, Marlene Lamonth, said the partnership with Jamaica is a testament to the shared commitment to fostering economic resilience, innovation and inclusive growth for the citizens. “The European Union’s decision to support Jamaica in this journey comes from the recognition of the vital role that MSMEs play in the economy. According to the PIOJ, MSMEs account for 80 per cent of employment in Jamaica, showing that you are the engine of economic growth and the lifeblood of the communities across the country,” Ms Lamonth said.

(Source: JIS)

• On March 17, 2025, GraceKennedy Financial Group Limited (GK) issued an offer to purchase 100% of the issued share capital of Key Insurance Company Limited for J$2.70 per share. The offer is set to open for acceptance on March 24, 2025, and will close on April 22, 2025.
• The acquisition is expected to cost J$403,707,601.80. The company plans to fund the acquisition from internally generated resources of the GraceKennedy Group.
• Key Insurance Company Limited operates as a general insurance company in Jamaica in the Motor and Non-Motor segments. The acquisition would allow for greater reach and market presence for GK, whilst reducing competition in its insurance segment.
• Key Insurance is currently listed on the JSE’s Main Market. Under the Main Market Rules, a company can be delisted if a single shareholder, directly or indirectly, controls more than 80% of a company’s listed shares. GK currently owns approximately 73% of Key's issued shares. As such, if upon completion of the Offer, its ownership stake exceeds the 80% threshold, the delisting would take effect after the bid is finished.
• Additionally, if enough of Key's Shareholders – excluding GK – accept the offer and bring GK’s ownership to at least 90% of the Key’s issued ordinary stock units, GK intends to exercise its rights to compulsorily acquire all remaining shares, regardless of whether the owners have expressly disagreed with or failed to respond to the Offer.
• Since the news release, KEY’s stock price has appreciated by 15.3% to close Tuesday’s trading session at $2.49, leaving an additional upside of 12.5% to the offer price.

(Source: JSE & NCBCM Research)

• On March 13, 2025, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Antigua and Barbuda and endorsed the staff appraisal.
• In concluding the 2025 Article IV consultation, the Executive Directors of the IMF endorsed the staff’s appraisal, as Antigua and Barbuda’s post-pandemic economic expansion continues. Economic activity, boosted by tourism, is estimated to have surpassed pre-pandemic levels, with growth estimated at 4.3%, driven by strong tourism and one-off events (including the 4th International Conference on Small Island Developing States and the T20 Cricket World Cup). As the recovery matures, the IMF projects economic growth to moderate from 3% in 2025 to 2.5% over the medium term.
• The recovery in nominal GDP, along with improved fiscal balances, brought down the public debt from around 100% of GDP in 2020 to 67% in 2024. However, gross financing needs are projected to remain around 10% of GDP in the medium term.
• The fiscal primary balance improved to 4.6% in 2024, aided by indirect tax increases, a broader economic recovery, and one-off factors (e.g., nearly 2% of GDP from an asset forfeiture and unusually low capital spending). The 2025 Budget envisages stronger tax revenues and higher capital spending. The recent improvement in tax revenue is welcomed by the IMF, with further domestic revenue mobilization needed in the medium term to ensure fiscal sustainability.
• Risks are currently tilted to the downside, emanating from elevated uncertainty about the global outlook, a deepening of geoeconomic fragmentation, commodity price volatility, climate-related vulnerabilities and capacity constraints in the construction sector.
• However, upside risks stemming from stronger demand for tourism, improved air connectivity, new cruise port facilities, hosting of special events and the intensification of productivity-enhancing structural reforms, which could support higher medium- and long-term growth are also present.

(Source: International Monetary Fund)

• The Barbados-based Caribbean Development Bank (CDB) is collaborating with the Caribbean Tourism Organisation (CTO) in a new initiative to modernise tourism education and workforce development across the Caribbean.
• The project is also aimed at strengthening the Caribbean's competitiveness in an industry vital to its economic stability. The Tourism Human Capital Development Project, funded through CDB's Caribbean Technological Consultancy Services (CTCS) Network, will allocate about US$400,000 to update training materials, develop workforce management tools, and deliver professional development programmes.
• Titled 'Enhancing the Knowledge and Skills of Tourism Workers in the Caribbean Region', the project aims to bolster the sustainability of the tourism industry, particularly for micro, small, and medium-sized enterprises (MSMEs).
• The CDB said that by modernising educational resources, the initiative will enhance tourism curricula, improve workplace management, and expand training opportunities for employers, workers, and entrepreneurs in CTO member countries. 'These efforts will equip industry professionals with the skills needed to adapt to evolving market demands and ensure the sector's long-term resilience,' said Dona Regis-Prosper, the CTO's secretary-general and chief executive officer.
• 'Strengthening our current and future workforce, from students and educators to MSMEs and industry leaders, is key to the sector's growth. Through targeted training, technical assistance, and enhanced educational resources, this project empowers individuals and businesses to elevate industry standards, improve service delivery and drive sustainable tourism development across the region.'

(Source: Trinidad Express Newspapers)

• U.S. import prices unexpectedly rose in February amid higher costs for consumer goods, which does not bode well for the inflation outlook.
• Import prices increased 0.4% last month, matching January's upwardly revised gain, the Labour Department's Bureau of Labour Statistics said on Tuesday. In the 12 months through February, import prices increased 2.0% after advancing 1.8% in January.
• Government data last week showed better-than-expected consumer and producer price readings in February, though there were firmer readings in the details that go into the calculation of the Personal Consumption Expenditures (PCE) price indexes, the inflation measures tracked by the Federal Reserve for its 2.0% target.
• Imported fuel prices increased 1.7% in February after surging 3.5% in January. Food prices were unchanged after climbing 0.2% in January.
• Excluding fuels and food, import prices shot up 0.4% after being unchanged in January. In the 12 months through February, core import prices rose 1.4%, reflecting earlier dollar strength against the currencies of the United States' main trade partners.

(Source: Reuters)

• The Bank of England is likely to keep interest rates on hold on Thursday and stick to its mantra of only gradual moves ahead as it grapples with the fallout from U.S. President Donald Trump's trade war and mixed news on Britain's economy.
• All 61 economists polled by Reuters last week expected the BoE to leave its benchmark interest rate on hold at 4.5%, with the next cut likely in May, followed by further reductions in August and November.
• Data published last week showed Britain's economy contracted unexpectedly in January but there was also a noticeable jump in public expectations for near – and long-term inflation. The Monetary Policy Committee will have early access to labour market figures that are due to be published on the morning of Thursday's interest rate announcement.
• "We're probably going to see some slowdown in hiring which, other things being equal, should mean wage pressures moderate," Dean Turner, an economist at UBS Wealth Management, said. "But I'm not expecting that we're going to see a sharp increase in layoffs."
• In February, seven MPC members backed a quarter-point cut while two opted for a bigger half-point reduction. Investors will be alert to any changes in the views of MPC members, some of whom have sounded more worried about the risk of persistent inflation than others.

(Source: Reuters)

• Main Event Entertainment Group (MEEG) reported a 26.5% decline in earnings for the quarter ending in January, reflecting rising costs and sluggish revenue growth.
• MEEG’s revenue grew just 3.0% to $585.03Mn, reflecting higher revenues from previously underperforming segments, which according to management reflects the success of targeted expansion efforts.  Despite these contributions, the company is yet to reach its Q1 2023 revenue peak of $626.99Mn.
• Direct costs rose by 12.5%, primarily driven by event execution costs, infrastructure upgrades, additional non-recurring expenses incurred during the period, and higher labour costs associated with service delivery. With direct costs outpacing revenue growth, gross margin contracted by 4.1 percentage points to 51.6%.
• Operating expenses also outpaced revenue growth, rising 7.5% to $218.72M – from $206.35M in Q1 2024. This increase was driven by planned administrative improvements, a substantial one-time expense for the Company’s 20th Anniversary celebration, higher personnel costs, increased security and fuel expenses and a 51% rise in amortisation expenses to $11.36M due to renegotiated lease agreements and the addition of a new lease.
• MEEG’s lower Q1 2025 earnings follow the 66.2% decline in earnings in FY2024, which the company also attributed to “lower gross profit margins and increases in certain cost categories aligned with its growth strategy”.
• MEEG entered the 2025 fiscal year with a strategic focus on expanding revenue streams and strengthening client relationships. The company plans to improve operational efficiencies while driving revenue growth through deeper market penetration and strategic partnerships. Additionally, there are plans to use its owned events as a key revenue growth driver.
• Amid the weaker earnings, MEEG’s stock price has depreciated by 7.7% since the start of the calendar year to close Monday’s trading session at $10.80.

(Source: JSE & NCBCM Research)

• Jamaica’s point-to-point (P2P) inflation fell at 4.4% in February 2025, according to data released by STATIN.  This is a reduction from the 4.7% P2P reading in January 2025 – bringing local inflation closer to the lower end of the Bank of Jamaica’s (BOJ) 4.0%-6.0% target range.
• The lower P2P can be attributed to a slower rise in the cost of ‘Electricity, Gas and Other Fuels’ (2.3%), which countered higher price increases from ‘Imputed Rentals for Housing’ (+5.1%).
• Meanwhile, the ‘Food and Non-Alcoholic Beverages’ (+6.5%) and ‘Restaurants and Accommodation Services’ (+6.2%) divisions increased at faster rates. The increase in the ‘Food and Non-Alcoholic Beverages’ division was mainly due to a 19.2% rise in the ‘Fruits and Nuts’ class and a 9.4% increase in the ‘Vegetables, tubers, plantains, cooking bananas and pulses’ class. The ‘Restaurants and Accommodation Services’ division was primarily impacted by a 6.1% increase in ‘Food and Beverage Serving Services’, amid higher costs of meals away from home.
• On a month-on-month basis, prices indicated by the All-Jamaica Consumer Price Index (CPI¹) for February decreased by 0.9% relative to January reflecting a 2.0% fall in the ‘Food and Non-Alcoholic Beverages’ division and a 0.2% decrease in the ‘Housing, Water, Electricity, Gas and Other Fuels’ division.
• STATIN’s latest CPI readings reinforce the Bank of Jamaica’s (BOJ’s) expectation that inflation will remain within its target range of 4%-6% over the next eight quarters. During its policy meeting on February 20, 2025, the BOJ concluded that the current policy rate of 6.00% remains appropriate to keep inflation within the target range and ensure stability in the foreign exchange market.
• However, the Trump administration’s tariffs – which triggered retaliatory measures from its key trade partners – and its immigration clampdown risk disrupting global trade and causing labour shortages in the US. These outcomes pose risks to the inflation outlooks in Jamaica and other emerging markets.
• The next decision will be made on March 27, when we expect the BOJ to maintain its rate, given the uncertainty that lies ahead, especially given policy uncertainty in the US.

_______________________

¹The Consumer Price Index (CPI) measures changes in the general level of prices for consumer goods and services purchased by private households.

(Source: STATIN, NCBCM Research)