• The International Monetary Fund (IMF) and the government of Barbados have reached a staff-level agreement on a 36-month precautionary Stand-By Arrangement (SBA) valued at Special Drawing Rights¹ (SDR) 189Mn, or approximately US$260Mn. The agreement remains subject to approval by the IMF Executive Board in June.
• The new SBA will provide Barbados with insurance in a shock-prone external environment, while helping preserve macroeconomic stability and supporting reforms under the homegrown Barbados Economic Recovery and Transformation Plan 2026 (BERT 2026). BERT 2026 marks the next phase of Barbados’ reform journey, moving from stabilisation and growth toward long-term transformation into a high-performing, inclusive, and climate-resilient economy.
• The SBA will support efforts to enhance public financial management, including the fiscal framework, management of public-private partnerships and State-Owned Enterprise (SOE) oversight; revenue policy and administration; productivity and competitiveness; climate resilience; financial supervision; and the Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) framework. The structural reform agenda will be supported by technical assistance from the Fund and other partners.
• According to the IMF, Barbados enters the proposed arrangement from a position of strengthened macroeconomic credibility. Guided by sound macroeconomic policies, economic activity remained robust in 2025, with growth estimated at 2.7%, driven by tourism, construction, and business services. Additionally, gross international reserves remained at about US$1.5Bn at end-2025, equivalent to around 6 months of imports, and remain ample to support the exchange rate peg.
• Fiscal performance continued to be strong, with the fiscal primary surplus reaching 4.2% of GDP in FY2025/26, and high corporate income tax revenues enabling an expansion of public investment in infrastructure and resilience. Furthermore, fiscal policy will continue to balance debt sustainability with development needs. This will require sustaining strong primary fiscal balances to keep public debt on track to reach the 60% of GDP target by FY2035/36, while maintaining fiscal space for critical investment, resilience, and social spending as noted by the IMF.
• However, the outlook remains subject to downside risks, including heightened global policy uncertainty, commodity price pressures, and Barbados’ vulnerability to natural disasters. Higher commodity prices are expected to place upward pressure on inflation and the current account deficit, although international reserves are projected to remain ample. External conditions are expected to normalise thereafter, but the outlook remains subject to unusually high uncertainty, with risks tilted to the downside.

_______________________

¹Special drawing rights are supplementary foreign exchange reserve assets defined and maintained by the IMF. SDRs are units of account for the IMF, and not a currency per se. SDRs represent a claim to currency held by IMF member countries for which they may be exchanged.

(Source: IMF)

• The International Monetary Fund (IMF) has recently expressed that Trinidad and Tobago (T&T) will record modest economic growth in 2026, supported by new energy projects and continued expansion in the non-energy sector. The projection came following the IMF Executive Board’s completion of its latest Article IV consultation with the twin-island republic.
• Economic activity continued its gradual recovery in 2025, with real GDP growth moderating to 0.8% and inflation returning to low, pre-pandemic levels. However, persistent fiscal deficits led to an increase in public debt. The current account balance remained in surplus, and while international reserves are trending downwards, they are supplemented by substantial (25% of GDP) liquid assets in the Heritage and Stabilisation Fund (HSF).
• Looking ahead, growth is projected to remain at around 0.8% in 2026 according to the IMF, and to strengthen over the medium term, supported by new energy projects and continued momentum in the non-energy sector. Additionally, inflation is expected to rise temporarily to around 3.1% in 2026, reflecting global commodity price developments, before stabilising around 2% over the medium term.
• The overall fiscal deficit is expected to decline to 4.6% of GDP in 2026, down from 5.5% in 2025, and international reserves are expected to remain adequate at about 5.5 months of imports. That said, higher energy prices are expected to support fiscal and external balances in the near term, while the government’s ongoing revenue and expenditure reforms, and new energy projects coming on stream, underpin a gradual improvement in the fiscal and external positions over the medium term.
• However, the IMF noted that the outlook is subject to significant uncertainty, including due to the impact of the war in the Middle East. Delays in new energy projects or disruptions to production from mature fields could weigh on growth, while faster implementation of reforms under the Revitalisation Blueprint¹ and sustained investment could lift medium-term growth prospects.

_______________________

¹The "Revitalisation Blueprint" refers to a comprehensive national development and urban renewal plan launched by the government of Trinidad and Tobago. It is a strategic vision designed to reshape the economy, modernise communities, and create jobs through infrastructure, tourism, and cultural projects.

(Source: IMF)

• President Donald Trump again raised the prospect of renewed military action against Iran, threatening to resume strikes in the coming days after saying he had just called off a planned U.S. attack as part of Washington’s push for a deal to end the war. Trump said he hoped the U.S. would not have to “do the war,” but warned that Iran may face “another big hit” within a limited period, possibly by the weekend or early next week.
• The warning comes as Iran continues to resist U.S. demands to relinquish the remaining elements of its nuclear programme, despite weeks of U.S. and Israeli strikes that began in late February. Trump has repeatedly threatened, and then backed off from, renewed military action since a truce was agreed on April 8.
• At the same time, Vice President JD Vance struck a somewhat more positive tone, saying the U.S. had made progress and that Iran appeared to want a deal. However, he also warned that the next option would be restarting the military campaign.
• Domestically, the Republican-led U.S. Senate has signalled growing unease over continuing the war, with a procedural vote reflecting concern over a foreign conflict that is taking a mounting financial toll on Americans ahead of midterm elections.
• Market pressures remain elevated, as the conflict has shut down the Strait of Hormuz, a vital waterway for oil and gas flows, causing global energy prices and inflation to surge. Iran has maintained a chokehold over Hormuz, pushing U.S. fuel pump prices to their highest level in almost four years.
• U.S. Treasury yields on the longest-dated bonds rose to their highest level in almost two decades as investors assessed the war’s growing macroeconomic impact. Brent crude fell around 1% on Tuesday, May 19, 2026, and traded above US$110 per barrel, but remains more than 50% higher since the war began.
• Further underscoring the fragility of the truce, the UAE’s Barakah nuclear-energy plant was hit by a drone, causing a fire at a power station. Normal power was later restored at the plant, easing safety concerns after the drone attack. However, oil prices remain supported by disrupted supply, uncertainty around the Strait of Hormuz, and unresolved U.S.-Iran negotiations.

(Source: Bloomberg)

• Japan’s economy grew at an annualised 2.1% in the first quarter of 2026, beating analysts’ expectations of 1.7%. Growth was supported by improved consumption and strong exports.
• On a quarter-on-quarter basis, the economy expanded 0.5%, ahead of estimates of 0.4%. This also marked an improvement from the 0.3% expansion recorded at the end of 2025.
• However, the figures do not capture the full impact of the Iran war, which started at the end of February 2026. Oxford Economics said the Q1 GDP figures are “already in the rear-view mirror,” as high energy costs are expected to weigh on the economy ahead.
• Exports grew by a better-than-expected 11.5% year-on-year in March 2026, partly driven by a 29.3% jump in shipments of semiconductor equipment. This reflects continued support from robust IT demand. Still, higher energy prices and elevated uncertainty are expected to limit consumption and investment, even as exports provide some short-term support.
• The Bank of Japan has cut its FY2026 growth forecast to 0.5% from 1.0% and raised its core inflation outlook to 2.8% from 1.9%, warning that higher crude oil prices could weigh on corporate profits and real household incomes. In addition, Tokyo is reportedly likely to issue fresh debt for an extra budget to cushion the economic blow from the Middle East war, as the country subsidises energy bills.

(Source: CNBC)

• The March 2026 quarter earnings season is in full swing, and Local Manufacturing and Distribution (M&D) Stocks are grabbing early headlines. Main Market M&D stocks, Seprod Limited (SEP) and Carreras Limited, have kicked it off with strong quarterly earnings. At the same time, results are mixed for Junior Market M&Ds, with growth from Atlantic Hardware & Plumbing Company Limited (AHPC) and Fontana Limited (FTNA), met by a slowdown from Woodcats International (WOODCATS).
• Seprod Limited (SEP) posted a 94.0% surge in quarterly net profit to $1.65Bn, as one-off gains and lower taxation expenses outweighed the dip in the group’s revenues. Core revenues declined by 3.4% to $36.42Bn amid continued Hurricane Melissa drag on the Hotels, Restaurants, and Catering (HORECA) channel. With direct expenses down by 3.3% to $9.70Bn, gross profit closed at $9.72Bn (-4.0%), and gross margins narrowed from 26.7% to 26.6%. However, the one-off gain for the divestment of a subsidiary, International Biscuits Limited (IBL), saw the group’s other operating income jump 8-fold to $952.25Mn. This and $475.52Mn in tax savings contributed to the surge in earnings. The filings did not disclose the source of the tax savings.
• Carreras Limited (CAR) also puffed up strong earnings. Its net profit surged by 78.0% to $2.51Bn, driven by strong revenue growth and cost management. Revenue grew by 57.3% to $6.29Bn. While the cost of sales grew faster than revenues (+62.1%) and gross margins narrowed marginally from 59% to 58%, gross profits increased by 54.0% to 4.02Bn. Notably, CAR’s strong earnings continue to support its higher dividend distributions. On May 11^th, the company declared an interim dividend of $0.46 per share, payable on June 18^th to shareholders on the register at May 27th, which is 14.2% higher than the previous distribution.
• As at May 19^th, SEPROD traded at $82.78, is down 1.4% and has a 11.53x P/E ratio. Meanwhile, CAR traded at $22.44, which is up 23.90% YTD and trades at a P/E of 14.15x. Both stocks trade below the 17.35x peer average for Main Market M&D stocks.
• On the Junior Market Front, Atlantic Hardware & Plumbing Company Limited (AHPC) stood out, with earnings tripling to $74.25Mn on strong revenue growth, improved gross margins and lower finance costs. Revenues climbed 49.5% to $687.1Mn on robust post-Melissa demand. Operating expenses rose 74.4% to $116.8Mn on higher staff, lease and motor vehicle expenses tied to its agro-distribution expansion. Nonetheless, operating profit still advanced 27.9% to $97.5Mn, contributing to the bottom line. Notably, Finance costs decreased by 46.7% to $23.3 million, due to significant debt repayments from the previous year, aided by including funds from its February 2025 Jr Market IPO and the sale of the 7A Ashenheim Road property. Tax expenses were nil compared to $8.14 million in Q1 2025, reflecting the 100% tax break from its Jr Market listing. At $1.84, the stock is up 7% year-to-date, and its P/E ratio of 26.67x is above the 17.28x peer median for Energy Material and Infrastructure (EMI) stocks.
• Fontana Limited (FTNA) also grew its earnings to $114.1Mn (+11.0%), with revenue rising 17.7% to $2.63Bn on same-store sales growth and contributions from its four recently integrated Monarch Pharmacy locations. Gross margin held steady at 36.9%, although EBITDA softened to $795.2Mn from $857.2Mn as operating expenses rose 18.2% on one-time Monarch integration and amortisation charges. At $6.48, FTNA shares are down 16.88% YTD and its P/E ratio of 17.51x is marginally below the 23.34x average for Junior Market Distribution Stocks.
• Bucking the trend, Woodcats International Limited’s (Woodcats’) earnings splintered by 13.7% to $14.30Mn, as the trailing impact of Hurricane Melissa, other climatic factors, and sales seasonality weighed on top-line performance. Revenues declined 5.3% to $241.88Mn, while administrative expenses rose 7.8% to $67.73Mn on one-time costs tied to its recent Junior Market listing. Additionally, finance costs climbed 33.6% to $6.10Mn, further compressing the bottom line. While Woodcats paid $4.77Mn in taxes, it is set to benefit from a five-year income tax exemption as a newly listed Junior Market entity, which should enhance earnings going forward. The company is also set to gain from its plant modernisation program and the new "waste-to-revenue" initiative launched in Q1. Management is also exploring export opportunities in the Eastern Caribbean. However, rising oil and fuel prices may strain the supply chain and logistics costs, potentially impacting margins as the company balances pricing with customer relationships. At $0.73, Woodcat’s stock is down 12.0% YTD and trades at a P/E of 10.43x, which is below the 15.01x average for Jr Market Manufacturing Companies.

(Sources: Company Filings via the JSE & NCBCM Research)

• A recent move by Dutch travel company Booking.com has raised concerns within the regional tourism sector and could eventually prompt governments to consider legislative action to protect industry revenues.
• Hoteliers and tourism stakeholders across the Caribbean are pushing back against a policy change communicated by the company. The move would see Booking.com charging commissions not only on room rates and related fees, but also on Value Added Tax (VAT) and other government-imposed taxes.
• Outgoing President of the Caribbean Hotel and Tourism Association (CHTA), Sanovnik Destang, said the organisation was alerted by hotel associations in Barbados and Grenada after they received correspondence from the company. According to Destang, the policy was set to take effect beginning May 15, 2026.
• Traditionally, hotel commissions are charged only on actual hotel revenues such as room rates and certain service fees; however, Booking.com is now seeking to apply commissions on government-imposed taxes like VAT and Goods and Services Tax (GST), which hotels collect on behalf of governments and do not retain as revenue.
• The issue quickly became a major point of discussion on the sidelines of the 44th Caribbean Hotel and Tourism Association Meeting in Antigua and Barbuda, with stakeholders voicing strong opposition to the proposed changes. Destang said representatives of the CHTA met directly with Booking.com officials during the conference and “seriously advocated against this.”
• “They've indicated that it's part of a global push. It's something that exists globally. But our argument is that what exists globally may not necessarily exist in the Caribbean,” he added. “Because regardless of legality, from a commercial standpoint, it's not practical. It's not fair to expect hotels to pay commissions of 15 percent, whatever percent — or 18 percent in some cases — on VAT, GST, and other taxes that hotels do not retain in the first place. So we've drawn a line in the sand at CHTA.”
• The proposed policy could reduce hotel profitability across tourism-dependent Caribbean economies, as operators would pay commissions on government-imposed taxes, potentially pressuring room rates and sector competitiveness. The move could also prompt Caribbean governments and tourism stakeholders to pursue regulatory action or alternative booking strategies to protect tourism revenues and reduce dependence on large international online travel agencies.

(Sources: SKN Vibes & NCBCM Research)

• Guyana is on the cusp of a sweeping transformation of its financial sector, with two landmark payment systems set to go live and three major international banks newly licensed to operate in the country.
• The most immediate development is the launch of FASTA, Guyana’s new real-time payment system, scheduled to go live on June 2, 2026. Once operational, customers across all participating banks will be able to send and receive funds instantly at any time and any day, using mobile phones or internet banking platforms. The system is expected to significantly reduce reliance on cash, lower transaction costs for households and businesses, and dramatically improve the speed and convenience of everyday financial activity, according to President Irfaan Ali.
• The second initiative is Guyana’s integration into India’s Unified Payment Interface (UPI), a digital payment architecture developed by the National Payment Corporation of India. Already processing billions of transactions monthly in India, UPI uses a Virtual Payment Address system that allows secure transfers without exposing sensitive bank account details. According to the president, through Guyana’s partnership with the Government of India, the system will link directly into the country’s growing digital payments ecosystem.
• “Together, these two initiatives will position Guyana at the forefront of digital financial transformation in the region,” President Ali said, “creating a faster, safer, and more inclusive payments environment for citizens and businesses alike.”
• Adding further momentum to the sector, the Bank of Guyana has licensed three new international financial institutions, including Citibank, Crown Agents, and One American to operate in the country. President Ali described the approvals as a clear vote of confidence in Guyana’s macroeconomic stability and regulatory credibility.
• While the institutions will not engage in retail deposit-taking, their presence is expected to significantly expand the country’s access to international capital markets, trade finance, corporate advisory services, and development financing. The president also pointed to strong underlying performance in the banking sector, noting that private sector credit grew by 20.4% year-on-year in 2025, with growth spread across construction, agriculture, wholesale and retail, and services, a sign, he said, of an economy building on multiple pillars.

(Source: Kaieteur News)

• Oil prices declined on Monday, May 18, 2026, after U.S. President Donald Trump said he had called off a planned military strike on Iran for Tuesday, May 19, 2026, following appeals from Persian Gulf allies, including Saudi Arabia, Qatar and the United Arab Emirates.
• Brent dropped below US$110 per barrel, after gaining 2.6% on Monday, while West Texas Intermediate (WTI) for July traded below US$103, as markets reacted to signs that immediate military escalation may be delayed.
• According to President Trump, Gulf leaders asked the U.S. to hold off on the attack because “serious negotiations” with Iran were taking place. However, he also warned that the U.S. remains prepared to strike if an acceptable deal is not reached.
• A US naval blockade has left Iran’s Kharg Island oil terminal idle for at least 10 days, cutting off Tehran’s petroleum revenues and withdrawing millions of barrels from the market. This is a reversal for the Islamic Republic, which had been the strait’s dominant crude exporter after barring other nations’ vessels from the waterway in the opening weeks of the war.
• Oil prices remain highly sensitive to the negotiation outlook, as the near-total closure of the Strait of Hormuz continues to threaten Persian Gulf energy supplies and keep supply risks elevated. Markets also weighed reports that Washington had proposed a temporary waiver on Iranian oil sanctions, although a U.S. official denied the report. Separately, the U.S. issued a new waiver allowing the sale of Russian crude and petroleum products already loaded on tankers.
• The pullback in oil reflects temporary relief from avoided military action, but prices remain structurally supported by disrupted supply, uncertainty around Hormuz, and unresolved U.S.-Iran negotiations.

(Source: Yahoo Finance)

• The European Union (EU) is expected to cut its growth outlook and raise its inflation forecast, as the Iran war creates what European Commissioner Valdis Dombrovskis described as a “stagflationary shock.”
• According to Dombrovskis, the European Commission’s spring forecast, due later this week, will show growth figures revised down and inflation figures revised up, reflecting the economic strain from higher energy prices and supply disruptions. Stagflation fears have intensified as a lasting settlement to the war remains elusive, while the Strait of Hormuz stays closed and oil prices remain above US$100 per barrel.
• The European Commissioner added that policymakers have less room to respond than during the pandemic. He noted that support measures should be temporary and targeted, rather than broad-based policies that could sustain high demand for fossil fuels.
• While the EU’s release of strategic oil reserves is ongoing, officials remain concerned that a prolonged conflict could create supply bottlenecks, including in areas such as innovation fuels.
• Furthermore, strategists and the International Energy Agency (IEA) warned that global oil inventories are shrinking rapidly, with depleted buffers raising the risk of future price spikes and possible shortages in Europe.
• The EU faces a difficult policy trade-off: cushioning households and firms from higher energy costs without worsening inflation or prolonging fossil-fuel demand, while weaker growth limits fiscal space.

(Source: CNBC)

• Given the challenging macroeconomic backdrop marked by the impact of Hurricane Melissa and heightened geopolitical tensions in the Middle East, first-quarter (Q1) 2026 results across Jamaica’s financial sector reflected a mixed earnings picture. While Sagicor Group Jamaica (SJ) Limited reported a sharp 53.7% decline in earnings to $1.87Bn due to unrealised investment losses and elevated insurance provisions, VM Investments Limited returned to profitability, supported by stronger investment activity and improved cost management despite still-subdued capital market conditions.
• Long-term insurance (LTI) remained SGJ’s largest earnings contributor, generating net profit of $2.08Bn, albeit lower than the $2.35Bn reported in Q1 2025, on the back of lower interest income earned and capital net gain. In contrast, the short-term insurance (STI) segment reported a marginal net loss of $0.02Bn compared to a profit of $0.87Bn in Q1 2025. The decline came as revenue gains (2.7%) were offset by a sharp rise in insurance service expenses (19.2%), which included additional provisions of approximately $0.77Bn recognised by Advantage General Insurance Company (AGIC) related to Hurricane Melissa claims.
• Commercial Banking emerged as one of the Group’s strongest-performing segments during the quarter, with earnings rising by 69.4% year-on-year to $0.83Bn. Revenues expanded by 13%, supported by higher net interest income and increased transaction volumes across card payment portfolios. Loan portfolio growth remained healthy, while deposits and other funding liabilities also expanded during the period.
• However, Investment Banking earnings declined sharply to $0.12Bn (77.8%) as net investment income fell by 29.1%. The weaker outturn primarily reflected the absence of one-off trading gains recognised in the prior year, coupled with persistently high short-term funding rates, which drove an increase in interest expense.
• Meanwhile, VM Investments Limited (VMIL) returned to profitability during the quarter, reporting consolidated net profit of $70.1Mn compared to a loss of $32.5Mn in Q1 2025. The recovery was bolstered by investment activity and tighter cost management despite subdued capital market conditions following Hurricane Melissa and the Middle East conflict.
• Operating revenues increased by $106.5Mn (16.8%), driven primarily by a 68.6% increase in gains from investment activities, which accounted for the majority of the improvement in total revenues. However, net interest income weakened significantly by 83.3% amid softer market conditions.
• Encouragingly, cost-containment measures continued to support the bottom line. Operating expenses declined by 9.0%, reflecting a 23.3% reduction in other operating costs. This comes as management continued to benefit from recently implemented cost-saving initiatives. Staff costs, however, increased by 9.5% due to inflation-related wage adjustments. Nevertheless, net operating income moved to a surplus of $77.53Mn in Q1 2026 compared to a deficit of $94.11Mn previously.
• VMIL earnings were also supported by contributions from associated companies, with the share of profit from associates totalling $25.5Mn. Although lower YoY (-41.8%), associate income continued to provide positive support and helped lift profit before taxation to $103.04Mn compared to a loss before tax of $50.26Mn in Q1 2025.
• As at the close of trading on May 14, 2026, SJ and VMIL’s ordinary share prices closed at $41.57 and $1.62, respectively, reflecting a 3.5% year-to-date increase for SJ and a 24.3% decrease for VMIL. At these prices, SJ and VMIL have a P/B ratio of 1.42x and 0.93x, respectively. SJ trades above the Main Market Financial Sector Average of 1.09x while VMIL trades below.

(Sources: SJ Financials, VMIL Financials & NCBCM Research)