• Mirco-lender Dolla Financial Services has announced that it will expand further in the region shortly. 
• In that regard, the company says it is awaiting consent from the Bank of Jamaica, to proceed with operations in St. Lucia and Barbados. In addition to Jamaica, the company is already operating in Guyana.
• Regional expansion is one of the strategies being used by Dolla to increase revenues and profit. In 2021, the Group established its fully-owned subsidiary, Dolla Guyana Inc, which contributed 11% to its total income and 13% to its profit before taxes in 2022. The expansion of its operation in other territories will enlarge the company’s loan portfolio, allowing it to generate income and returns for its shareholders.

(Source: RJR News)

• The Ministry of Industry, Investment, and Commerce is looking to further expand the local business process outsourcing (BPO) sector. Portfolio Minister, Senator the Hon. Aubyn Hill, said the sector remains a vital asset to Jamaica’s labour force.
• He noted that “It is a sector which the Ministry has a special interest in expanding; BPO is vital to us. We have to find new areas and new ways to employ our people and the skills business, the knowledge business is where we are going to have to expand.”
• Currently, it is estimated that the BPO sector contributes approximately $136 billion to the Jamaican economy annually, noting that this is equivalent to about six per cent of gross domestic product (GDP) annually. He emphasized that training and upskilling of citizens are critical to creating a fit-for-purpose workforce to respond to the demands of the modern labour market.
• Minister Hill was addressing the official opening of 76 Red Hills Road (RHR) Business Centre in Kingston on Wednesday (May 31). It is approximately 140,400 sq. ft. and includes 97,200 sq ft. of BPO facilities, which will yield roughly 1,800 direct jobs with additional indirect employment.
• This initiative is a significant investment within the Red Hills Road community and within the context of the Special Economic Zones and the business process outsourcing sector. This investment is an approved SEZ development business centre and is an important addition to Jamaica’s economic growth efforts.

(Source: JIS News)

• Fitch now forecasts that Brazil will see 1.7% real GDP growth in 2023, up from 1.2% previously, after a strong Q123 GDP print and solid economic data thus far in Q223.
• Real GDP growth came in at 4.0% y-o-y in Q123, well above Bloomberg consensus of 3.1%, and 1.9% q-o-q seasonally adjusted (consensus: 1.2%). This followed a series of solid high-frequency data releases, which saw Fitch revising up its real GDP growth forecast from 1.0% to 1.2% in early May.
• The growth in Q123 was largely driven by private consumption (which added 2.3 percentage points (pp) to overall growth) and net exports (0.7pp, in part due to a strong performance by the agricultural sector).
• Fitch’s forecast places them above Bloomberg consensus of 1.0% (which will likely rise post-Q123 print), though Fitch still expects the economy will slow sharply in the rest of the year as high interest rates weigh on private demand and investment.
• Fitch has also lowered its 2024 forecast from 2.2% to 2.0%, given the less favourable base of comparison (consensus: 1.6%).
• The risks to this forecast will materialize in the form of good economic data in H123 that leads the Banco Central do Brasil to keep a hawkish stance for longer, resulting in weaker growth than currently expected in late 2023 and 2024.

(Source: Fitch Solutions)

• One out of every $5 spent by the Government on its recurrent costs during the upcoming 2023-2024 fiscal year will go towards paying the $612.726Mn interest bill on its outstanding $11Bn-plus national debt.
• Documents accompanying the 2023-2024 Budget reveal that 19.99% of recurrent, or fixed cost, spending is earmarked to cover debt servicing costs which remain the largest single line item in the Davis administration's expenditure Budget for the 12 months to end-June 2014.
• With subsidies to loss-making state-owned enterprises (SOEs) consuming a further $408.098Mn, some $1.02Bn of recurrent spending - equivalent to one-third of the total, or one out of every $3 spent by the Government - will go on this and interest payments alone.
• The Budget forecasts reveal that central government debt, in absolute terms, is not forecast to peak until the upcoming fiscal year when it is forecast to hit $11.74Bn. It is then projected to decline relatively slowly and will still be above $11Bn in the 2026-2027 fiscal year, with the Government relying on a growing economy to keep the debt-to-GDP ratio (88.6% in 2022) in check.
• In the meantime, The Bahamas' elevated debt levels and interest bill (debt servicing costs) will continue to suck much-needed taxpayer dollars and funding away from essential Bahamian public services such as health, education, social services and national security.

(Source: The Tribune)

• Higher rates and overhangs from this year’s banking crisis will drastically slow economic growth for the biggest global economies, the World Bank said Tuesday. The institution said advanced economies — the U.S., Japan and euro area countries — are expected to grow by only 0.7% in 2023, down from 2.6% in 2022.
• The U.S. is projected to grow 1.1%, while the euro area and Japan are projected to see GDP growth of less than 1% in 2023. U.S. GDP growth is expected to decelerate in 2024 to 0.8% amid the higher rates.
• The bank estimates overall global growth will decelerate to 2.1% in 2023, down from 3.1% last year. Emerging and developing economies are forecast to see a slight uptick in gross domestic product to 4%, up 0.6% from the bank’s projections made in January 2023. However, World Bank chief economist Indermit Gill said excluding China, growth in developing economies would be less than 3%. This marks “one of the weakest growth rates in the last five decades,” Gill told reporters Tuesday.
• The reduced forecasts for growth reflect broad-based downgrades stemming from several overlapping shocks, the most recent of which include spillover effects from the recent banking crisis seen in the U.S. and advanced economies. Increasingly restrictive credit conditions resulting from the banking turmoil have effectively shut out emerging and developing economies from global bond markets, putting them “in dangerous waters,” said the bank.
• Fiscal weakness has dealt a further blow to low-income countries, 14 out of 28 of which are now in debt distress or at high risk of debt distress, according to the report. One-third of these countries are expected to see per capita incomes in 2024 remain at 2019 levels.

(Source: CNBC)

• Oil prices eased on Tuesday as worries of sluggish global economic growth reducing energy demand outweighed Saudi Arabia's pledge to deepen output cuts. Both crude benchmarks climbed higher for a third day in a row on Monday after Saudi Arabia, the world's top exporter, said over the weekend that its output would drop by 1 million barrels per day (bpd) to 9 million bpd in July.
• Additionally, weaker demand, stronger non-OPEC supply, slower economic growth in China and potential recessions in the U.S. and Europe mean the Saudi cut is unlikely to achieve a "sustainable price increase" into the high $80s and low $90s, Citi analysts said in a note on Tuesday.
• The U.S. dollar, meanwhile, rose to its highest level against a basket of currencies since hitting a 10-week high on May 31 as investors waited on fresh signals on whether the U.S. Federal Reserve will raise or hold interest rates in June. A stronger dollar can weigh on oil demand by making the fuel more expensive for holders of other currencies.

(Source: CNBC)

• Jamaica’s economy grew by an estimated 2.7% during the January to March 2023 quarter. This represents the eighth consecutive quarter of growth recorded, according to the Director General of the Planning Institute of Jamaica (PIOJ), Dr. Wayne Henry.
• He highlighted that the preliminary outturn for the quarter resulted in a growth of 4.3% for Fiscal Year 2022/23 and represents full recovery in overall output levels from the impact of COVID-19, one year before the projected recovery date of Fiscal Year 2023/24.
• The March 2023 outturn largely reflected the impact of increased external demand, especially for Jamaica’s Tourism product. It also reflected the resumption of operations at the Jamalco Alumina plant in Clarendon during the July to September 2022 quarter, following the facility’s closure in August 2021, due to a fire.
• A breakdown of the outturn shows that the Services Industry grew by an estimated 3.8% owing to expansion in all subsectors, buoyed by those associated with travel and tourism.
• However, the Goods Producing Industry contracted by an estimated 0.7%. Only two of the four Goods Producing Industry subsectors, ‘Mining and Quarrying’ and ‘Manufacturing’, recorded growth. ‘Mining and Quarrying’ grew by an estimated 95.9%, due to higher alumina output, which outweighed a contraction in crude bauxite production.
• The economy is projected to grow in the range of two to three per cent. This, the Director General noted, is based on the continuation of the growth momentum in most industries.

(Source: JIS News)

• A robust strategy that will better enable Jamaicans to tap into the vast potential of the local tourism sector is being developed by the Government. The move is in partnership with the Inter-American Development Bank (IDB) and involves key stakeholders in the industry. It will address economic growth, environmental sustainability, cultural preservation, and quality of life issues.
• Addressing the first Tourism Strategy Development Workshop at the Montego Bay Convention Centre in Rose Hall, St. James, on June 2, Tourism Minister, Hon. Edmund Bartlett, said that a well-defined tourism strategy and action plan “will help us identify the strengths and weaknesses of our tourism industry, chart our goals and objectives, and define the road map to achieve them”.
• He noted that while the country remains a prime tourist destination, attracting millions of visitors from all over the world every year, it has to evolve to maintain a competitive edge over rival destinations.
• As such, the Minister highlighted that the need for a strong and comprehensive tourism strategy will further drive economic growth and development.
• The focus on the sector is important given that tourism now generates direct employment for 175,000 Jamaicans and indirect employment for more than 354,000 others, including farmers, craft vendors, entertainers and transportation operators. The development of the strategy aims to make tourism inclusive, and an even bigger driver of economic development in years to come.

(Source: JIS News)

• Fitch forecasts a slight deceleration in growth for Trinidad and Tobago from its 2022 estimate of 2.7% to 2.2% in 2023. This is broadly consistent with the latest data points which show that real GDP grew just 2.5% y-o-y in Q322, compared to 5.7% in Q222, and is underpinned by Fitch’s expectation of still-high inflation and fairly weak export growth in the quarters ahead.
• Notably, most of the deceleration will be driven by private consumption which, despite a solid labour market, will suffer from high inflation impacted by lower energy subsidies. Private consumption growth will contribute just 1.8 percentage points (pp) to headline real GDP growth in 2023, compared to 2.7 pp in 2022. 
• Net exports, meanwhile, will serve as a drag on headline growth given a somewhat bleak outlook for US growth and limited hydrocarbon production growth in 2023. Fitch forecasts that net exports will reduce headline real GDP growth by 0.3pp in 2023, compared to a 1.0pp reduction in 2022.
• Overall, Fitch believes that real GDP growth will average just 1.9% between 2024-2027, largely weighed down by a poor medium-term outlook for exports. Notwithstanding, inflation pressures are expected to ease over time coupled with the full recovery in tourist arrivals, which will help keep private consumption growth somewhat elevated in the medium term.

(Source: Fitch Solutions)

• Brazil's economy rebounded more than expected in the first quarter, boosted by a strong farm sector, paving the way for a rosier annual outlook, although high-interest rates are still expected to trigger a sharp slowdown.
• The country's gross domestic product (GDP) expanded by 1.9% in the three months through March, rebounding from a revised 0.1% contraction in the previous quarter, data from the Brazilian Institute of Geography and Statistics (IBGE) showed.
• Growth from the prior quarter exceeded the 1.3% median forecast in a Reuters poll of economists, largely driven by a 21.6% surge in agriculture. The service sector expanded by 0.6%, while the industry declined by 0.1%.
• On the demand side, household consumption rose by 0.2%, while government spending increased by 0.3%.
• Compared to a year earlier, Latin America's largest economy grew by 4.0% in the first quarter, also more than the projected 3.0% expansion.
• Notably, private economists surveyed weekly by the central bank have also improved their GDP estimate, now predicting 1.26% growth that still represents a sharp deceleration from the 2.9% increase in 2022.

(Source: Reuters)