• The Canadian federal government, led by Prime Minister Justin Trudeau, is allocating over C$471Mn to Toronto to address the housing crisis and enhance affordability.
• Trudeau, whose popularity has slumped in recent months amid complaints about housing affordability, said the money would allow Toronto to fast-track nearly 12,000 new housing units over the next three years, abating the pressing housing shortage in the city.
• The allocated money comes from a CAD $4Bn fund, encouraging cities to relax zoning rules. Toronto, in return, has committed to streamlining zoning approvals, expanding affordable rental programs, reducing red tape, and facilitating non-market housing.
• The federal government's housing initiatives are part of a broader national strategy to combat housing affordability challenges. The housing crisis in Toronto, exacerbated by factors like rising interest rates and population growth, has contributed to a decline in Prime Minister Trudeau's popularity, as indicated by polls suggesting a challenging electoral landscape for the ruling Liberal party.

(Source: Reuters)

• The Bank of Jamaica’s (BOJ) Monetary Policy Committee (MPC), at its meetings on 18 and 19 December 2023, unanimously agreed to maintain the policy interest rate at 7.0%.
• Jamaica’s annual headline inflation rate at November 2023 of 6.3% was above the 5.1% at October 2023 but much lower than the peak rate of 11.8% recorded at April 2022. Core inflation (which excludes food and fuel prices from the Consumer Price Index (CPI)) was 5.6% at November 2023, generally in line with the average for the past three months and lower than the 8.4% recorded at April 2022. This trend suggests that core inflation is being contained, which bodes well for the longer-term inflation outlook.
• The key drivers of headline inflation, such as international commodity prices and shipping costs, continued to decline, and the exchange rate has remained generally stable, given the monetary policy actions as well as strong tourism and remittance inflows. Further, international oil prices have trended below the Bank’s forecast, mainly due to the weaker-than-forecasted impact of production cuts by major oil producers. Average grains prices were also well below the Bank’s forecast and are expected to remain below projections over the near term. Inflation in the economies of Jamaica’s main trading partners has also continued to decline.
• Importantly, for the BOJ, the increase in inflation in November is consequent on high domestic agricultural prices due to adverse weather and the increase in PPV fares by the government. It, therefore, views the fluctuations in inflation outside the target band as temporary.
• The risks to the inflation outlook are, however, skewed to the downside (inflation lower than projected), including the possibility that oil and grains prices could trend well below the forecast. Other downside risks also include weaker-than-expected global growth, which could have a stronger-than-projected downward pull on domestic demand and imported inflation, resulting in lower levels of price changes.
• Future monetary policy decisions will depend on the incoming data. The Committee decided to maintain heightened surveillance of the risks and core inflation. The MPC is prepared to take the necessary actions, including further tightening of monetary policy, if any upside risks to inflation materialise. The date of the next policy decision announcement is 20 February 2024.

(Source: BOJ)

• For the period January to August 2023, Jamaica’s total spending on imports was valued at US$5,078.8Mn, representing a 1.4% or US$74.5Mn decrease relative to last year, while earnings from total exports were valued at US$1,411.5Mn, 29.0% above export earnings in the corresponding 2022 period.
• The decline in imports was largely attributable to lower imports of “Raw Materials/Intermediate Goods” and “Fuels and Lubricants”, which declined by 0.6% and 19.6%, respectively.
• Meanwhile, increased exports of “Crude Materials (excl. Fuels)” drove the export gains. Domestic exports increased by 24.3% to US$1,075.1Mn compared to US$864.7Mn for the 2022 period, while re-exports increased by 46.7% to value US$336.3Mn. A country’s total exports consist of both domestic and foreign goods, with the foreign goods being referred to as re-exports. Re-exports involve the exportation of foreign goods in the same state as previously imported, while domestic exports represent goods produced within the country.
• The value of imports for January to August 2023 from Jamaica’s five main trading partners, the United States of America (USA), China, Brazil, Japan, and Colombia, was US$3,114.9Mn or 61.3% of total imports. This represents a 0.8% decline compared to the US$3,139.5Mn spent for the corresponding 2022 period due largely to lower imports of fuels from the USA.
• The top five destinations for Jamaica’s exports were the USA, Puerto Rico, Latvia, and the Russian Federation. Export revenues from these countries increased by 27.4% to US$977.0Mn.

(Source: STATIN)

• From January 1 next year onwards, Grenadian employers, including the government, will implement increased minimum salaries or wages for workers, encompassing trainees, part-time, and full-time employees.
• The new minimum wage, set at a minimum of EC$1,200 per month or EC$60 per day, will now include an expanded category of workers such as media workers, call centre workers, helpers on construction sites, and sanitization workers.
• The revised minimum wage order covers a diverse range of workers, including industrial and clerical staff, security guards, domestic workers, caregivers of the elderly, workers in bakeries, agricultural workers, construction workers, shop assistants, workers in the hospitality industry, and vehicle drivers.

 (Source: Reuters)

• Heading into 2024, analysts say the U.S. recession they'd been forecasting for two years isn't coming anymore. However, everyone else, from companies to investors, is still bracing for a slowdown caused by tepid consumer demand.
• The dissonance between the habitually bullish investment bank analysts and the more circumspect money managers is not new. What is different this time is the level of prudence and caution from some top companies as they outline their plans for next year.
• Real money managers are in no doubt about which side to trust. After months of being wrong-footed, sell-side analysts are a bit too bullish about growth prospects, Fed rate cuts, and a consumption recovery, they say.
• A year ago, many banks were forecasting a U.S. recession; however, consensus forecasts from major banks, including Goldman Sachs, Morgan Stanley, UBS, and Barclays, are for global growth to be constrained in 2024 by elevated interest rates, pricier oil, and a weakened China, but with low odds for a recession.
• The last two years have posed challenges for macroeconomic analysts attempting to reconcile the dynamics of a post-pandemic recovery, substantial global stimulus, and the stance of hawkish central banks.
• Despite indicators suggesting a slowdown or recession, the consensus on the likelihood of a U.S. recession within a year has shifted from consistently above 60% in 2022 and mid-2023 to around 45%.

(Source: Reuters)

• Mortgage demand decreased in the past week despite a drop in average contract interest rates for 30-year fixed-rate mortgages. The rates reached their lowest level since June 2023, but the borrower response was tepid.
• Refinance applications fell by 2.0% after a 19.0% increase the previous week, yet remained 18.0% higher compared to the same period last year. Applications for purchasing a home also declined by 1.0% for the week and were 18.0% lower than the previous year.
• The Mortgage Bankers Association anticipates positive developments in the housing market despite a predicted "mild recession" in the first half of the next year.
• The expectation is based on the Federal Reserve's indication of multiple rate cuts, with the association forecasting a 22.0% increase in mortgage origination volume in 2024 to $2 trillion, driven by a 14.0% rise in purchase volume and a 56.0% surge in refinance demand.

(Source: Reuters)

• iCreate Limited (“iCreate”) advised that effective December 18, 2023, Mr. Kenneth Tomlinson was appointed receiver and manager by Sagicor Investments Jamaica Limited, the registered holder of a secured bond.
• A receivership is a remedy available to secured creditors to recover amounts outstanding under a secured loan in the event the company defaults on its loan payments. A receiver is appointed to take possession of and sell or liquidate the assets secured by the security agreement in order to repay the outstanding debt.
• This news comes following the return of Tyrone Wilson as CEO of the company in November after his resignation in August.
• Additionally, in August, iCreate was suspended by the Jamaica Stock Exchange due to a lack of submission of its audited financials and the non-appointment of a mentor, as required by the Junior Market Rules. The suspension has since been lifted.

(Source: JSE)

• The Tourism Ministry has reaffirmed its commitment to training and certifying a competent workforce to meet the impending influx of visitor arrivals in the coming years. Portfolio Minister Hon. Edmund Bartlett stated that the industry will generate 45,000 new jobs in the next few years, buoyed by the construction of new hotels and the expansion of room stock, which will soon reach 20,000 rooms.
• The Minister noted that the Jamaica Centre for Tourism Innovation (JCTI)- the Ministry’s training arm, is seen as a critical step in preparing workers to meet the demands of the expanding industry.
• In addition to the expanding room stock, the global tourism industry is gearing up for an influx of one billion more tourists over the next 10 to 15 years. Mr. Bartlett expressed an unwavering commitment to ensuring Jamaica is a preferred destination for global travellers. To achieve this goal, Minister Bartlett emphasised the importance of a well-trained workforce capable of delivering the highest level of service.
• “The future of tourism for an economy is about qualified competent staff because productivity is what drives economic growth, and we can only be assured of productive capacity if there is technical competence and the only way we know of technical competence is certification,” Mr. Bartlett stated.

(Source: JIS)

• Barbados’ current account deficit is expected to narrow from an estimated 8.4% of GDP in 2023 to 6.7% in 2024, normalising after double-digit deficits in 2021 and 2022. The narrower current account deficit is likely the product of a wider services trade surplus on the back of an ongoing tourism recovery. 
• The country’s ongoing tourism recovery is expected to continue next year, even as growth in source markets slows, while domestic demand should drop off somewhat in part due to fiscal consolidation.
• Arrivals data from the UN World Tourism Organization (UNWTO) shows that 2023 is on track to be the best year for the sector since 2019. Arrivals through September are up 18.7% YoY, though they are still roughly 15.0% below the total at the same point in 2019.
• Fitch expects arrivals to continue to normalise in 2024. However, the entity noted that upward momentum will probably be capped by slower growth in the UK, US, and Canada, which account for the vast majority of arrivals.
• Nonetheless, Fitch sees minimal risks to Barbados’ external stability moving forward, given solid reserves and the country’s good relationship with the IMF.

 (Source: Fitch Solutions)

• On Monday, the Organization for Economic Cooperation and Development (OECD) urged Brazil to reconsider its mandatory expenditures and dismantle trade barriers to bolster the potential growth of Latin America's largest economy.
• In its latest edition of the Economic Survey of Brazil, the OECD noted a lack of progress on its 2020 advice to make the federal budget more flexible by closely examining revenue earmarks, mandatory spending floors, and indexation mechanisms.
• The multilateral organization, which Brazil began to join last year, suggested that social benefits could be indexed to inflation rather than the minimum wage, for example. However, President Luiz Inacio Lula da Silva, who took office in January, has argued for raising the minimum wage more than inflation as a priority to boost families' disposable income.
• One impact of that is more mandatory government spending, as many federal expenses are indexed to the minimum wage.
• Finance Minister Fernando Haddad said in April that the government would propose new rules for the growth of mandatory expenses by the end of this year, a politically sensitive idea for the leftist government that has yet to materialize.
• The OECD also evaluated Brazil's trade openness in its report, noting that despite recent progress, it lags other emerging economies. The organization suggested that lowering trade barriers could ease access to foreign markets and help the country participate more in global value chains.