• The Federal Reserve dialled back its inflation projections on Wednesday, seeing projected core Personal Consumption Expenditures (PCE) falling to 2.4% in 2024. The central bank also predicted that the core personal consumption expenditures price index will decline to 2.2% by 2025 and reach its 2.0% target in 2026.
• These new forecasts suggest a softer inflation picture in the next two years relative to September. Originally, the Fed had foreseen the core PCE hitting 2.6% in 2024 and 2.3% in 2025. While this may be so, in the post-meeting statement released last Wednesday, the Federal Open Market Committee said inflation has “eased over the past year” while maintaining its description of prices as “elevated.”
• While the public watches the consumer price index more closely as an inflation measure, the Fed prefers the core PCE reading. The former measure primarily looks at what goods and services cost, while the latter focuses on what people spend, adjusting for consumer behaviour when prices fluctuate. Core CPI was at 4.0% in November, while headline was at 3.1%.
• Committee members also upgraded their forecast for gross domestic product (GDP). GDP is now expected to grow at a 2.6% annualised pace in 2023, a half percentage point increase from the last update in September. Officials see GDP at 1.4% in 2024, roughly unchanged from the previous outlook. However, projections for the unemployment rate were largely unchanged, at 3.8% in 2023 and rising to 4.1% in subsequent years.
• Projections released by the Fed showed the central bank would slash rates to a median of 4.6% by the end of 2024, a three quarter-point reduction from the current targeted range between 5.25%-5.5%.

(Source: Reuters)

• The entertainment and telecommunications sectors are poised to encounter significant challenges in 2024. Global TV ad revenue is projected to decline by 18%, impacting executives, investors, and employees. In addition, uncertainties surrounding interest rates, regulatory policies, and overall growth prospects add to the complexities faced by these industries.
• In response to the challenging landscape, companies like Warner Bros. Discovery and Disney have strategically implemented measures such as job cuts and cost reductions. The primary objective is to bolster free cash flow, reduce debt, and present a more favourable financial outlook to investors. Notably, Disney's recent reinstatement of dividends signalled a potential positive shift.
• 2024 is anticipated to be marked by persistent uncertainties, particularly concerning interest rates, regulatory policies, and overall industry growth. Executives and industry experts foresee 2025 as a pivotal year, expecting increased clarity that could drive transformative deal-making in the media and telecommunications sector.
• However, regulatory challenges pose a significant hurdle to industry consolidation, prompting CEOs to express the need for policy changes that facilitate strategic mergers.
• The dance between major players like NBCUniversal, Warner Bros. Discovery, and Paramount Global adds a layer of uncertainty, with the potential for regulatory scrutiny on mergers and combinations of major assets. The industry is poised for a final round of consolidation, but concerns over regulatory approval timelines and potential obstacles remain prevalent.

(Source: Reuters)

• Consumer prices rose 1.6% in November, the highest monthly rate for the calendar year to date. This upward movement in inflation was influenced mainly by a 9.9% increase in the index for the ‘Transport’ division, given a 19.0% increase in route taxi and hackney carriage fares.
• ‘Water Supply and Miscellaneous Services Relating to the Dwelling’ and ‘Food and Non-Alcoholic Beverages’ were the other notable contributors to inflation in November. Higher sewage and water rates were the primary drivers of the 1.3% increase in the former index. With higher prices for bread, chicken, and agricultural produce, such as tomato, carrot, and green banana, the index for Food and Non-alcoholic beverages rose 1.0%. Given the sharp increase in consumer prices for November, the point-to-point inflation rate was 6.3%, and fiscal year- to-date the inflation rate was 6.7%.
• Despite inflation rising above its target range, on November 21, 2023, the BOJ maintained its policy rate at 7.0% as it continues to monitor the pass-through effects of previous hikes on deposit and loan rates.
• According to the BOJ, inflation is projected to rise above the Bank’s target range of 4.0% to 6.0% between the December 2023 and March 2025 quarters. The projected acceleration in inflation primarily reflects the impact of the announced increases in select public passenger vehicle (PPV) fares in October 2023 and April 2024.
• The forecast also assumes that oil prices will be elevated over the next three quarters (December 2023 to June 2024). International grain prices are, however, projected to continue to fall in the context of buoyant supplies. In contrast, shipping prices are forecasted to remain low and stable, given a projected slowdown in global growth.
• The next policy decision will be on the 20th of December when it is expected that BOJ will maintain its policy rate at 7.0%.

(Sources: STATIN & BOJ)

• Minister of Tourism, Hon. Edmund Bartlett, says the country is expected to welcome over one million stopover visitors for the 2023/24 winter tourist season. He noted that the season is expected to surpass all previous records, making it the largest in the nation’s history.
• “This achievement underscores the unwavering confidence and support of tourists worldwide, as they continue to choose Jamaica as their preferred holiday destination,” the Minister stated. “Remember, the cruise numbers are not included here. We have already secured 1.5Mn seats across the markets of the world, and assuming a very low 75.0% load factor from the airlines coming in, we will be more than one million stopover arrivals for the season,” he added.
• “Through strategic partnerships and investments in infrastructure, the government aims to enhance Jamaica’s appeal and competitiveness in the global tourism landscape,” he stated.
• “As the winter tourist season begins, we can assure our visitors that their health and safety remain the top priority. Efforts will continue to be made to adapt and address any emerging challenges, ensuring an unforgettable vacation experience in Jamaica,” he added.

(Source: JIS)

• The Government of Antigua and Barbuda is going ahead with its plan to implement an increase in the Antigua and Barbuda Sales Tax (ABST) despite facing both public and political pushback.
• The primary focus of the Bill is to raise the current ABST rate from 15% to 17%. The government cites financial challenges as the driving force behind the decision, asserting the need for fiscal measures to bolster revenue streams.
• The Deputy Commissioner of the Inland Revenue Department, Jermaine Jarvis, anticipates that the ABST increase will contribute significantly to surpassing the tax revenue collected in 2022, which amounted to $752Mn. Of this total, slightly over $300Mn was attributed to ABST.
• Cabinet has unveiled plans to amend the existing “sin taxes” on alcohol, tobacco, and gaming. Additionally, a modest increase in airport taxes is anticipated, aligning with the government’s broader efforts to meet airport operation obligations.
• While these measures are positioned as essential for addressing financial challenges, they have encountered resistance from residents and the opposition United Progressive Party, with the latter picketing the Budget Speech in protest.

(Source: Antigua Observer)

• The Economic Commission for Latin America and the Caribbean (ECLAC) says economic activity in the region continues to exhibit a low growth trajectory.
• In its 'Preliminary Overview of the Economies of Latin America and the Caribbean 2023', ECLAC said, 'the region will stay on a path of low growth, which means job creation will decelerate and informality and gender gaps will persist, among other effects'.
• According to the report, Latin America and the Caribbean will grow 2.2% on average in 2023 and 1.9% in 2024, which points to a deceleration in regional growth from the levels seen in prior years.
• Although all the sub-regions will have lower growth in 2023 than in 2022, the report emphasises the heterogeneity among countries in the region. South America is expected to grow by 1.5% for 2023 relative to 3.8% in 2022; Central America (including Mexico) by 3.5%, down from 4.1% last year and the Caribbean, without including Guyana, is forecast to grow by 3.4%, down from 6.4% last year.
• The report also noted that in 2024, the region is expected to maintain this dynamic of low growth, and all the sub-regions will grow less than in 2023, with the Caribbean predicted to register 2.6% in 2024, excluding Guyana.
• These projections reflect, in part, low dynamism in economic growth and global trade, which translates into a limited impetus from the global economy. Furthermore, although inflation has declined, the interest rates of the main developed economies have not, which means that financing costs have remained at high levels throughout the year and are expected to stay that way in the coming years.
• Lastly, ECLAC said this low growth is also attributable to the limited domestic space for fiscal and monetary policy faced by the region's countries.

(Source: Trinidad Express Newspapers)

• Contrary to initial projections of a recession in the US by the Federal Reserve, the economy showed faster-than-expected progress on inflation, minimal jobless rate increase, and a robust 5 times growth compared to forecasts.
• The unexpected positive economic indicators prompted a shift in Federal Reserve policy towards potential rate cuts, leading to anticipation of a quicker pace of interest rate easing.
• The market now anticipates increased issuance of investment-grade bonds in the coming year, totalling $770Bn in 2024, as companies seek to take advantage of lower borrowing costs resulting from the potential rate cuts.
• Market dynamics have shifted in favour of borrowers, with a combination of lower borrowing costs, tightening credit spreads, and increased investor appetite for riskier corporate debt. This change is influenced by the perception that the Federal Reserve may be concluding its hiking cycle.

(Source: Reuters)

• Canada's main stock index rose on Monday, led by gains for the energy sector, as optimism that central banks could soon begin cutting interest rates boosted the market.
• Falling bond yields, tighter credit spreads, and rising expectations that the Federal Reserve and the Bank of Canada will cut interest rates in 2024 are tailwinds for the stock market, said Stan Wong, a portfolio manager at Scotia Wealth Management.
• Canada's consumer price index report, due on Tuesday, could offer clues on the Bank of Canada policy outlook. Economists expect inflation to slow to an annual rate of 2.9% in November from 3.1% in October.
• Still, the stock market rally "may have run a bit too far too fast," said Wong, adding, "We've become a little bit more cautious over the very near-term, not committing a lot of cash into stock markets now, just given the fact that we're overbought."
• The energy sector rallied 1.5% as the price of oil settled 1.5% higher at $72.47 a barrel, with attacks by the Iran-aligned Yemeni Houthi militant group on ships in the Red Sea disrupting maritime trade and pushing up costs of supply. Consumer discretionary also added 1.5%, and heavily weighted financials were up 0.4%.

(Source: Reuters)

• The Agri-Linkages Exchange (ALEX) platform has generated more than $1Bn in sales for small farmers so far in 2023.
• This was disclosed by Minister of Tourism, Hon. Edmund Bartlett, during a statement to the House of Representatives on Tuesday (December 12). 
• The ALEX platform is a collaborative initiative between the Tourism Enhancement Fund (TEF) and the Rural Agricultural Development Authority (RADA), which has revolutionized the interaction between hoteliers and farmers.
• The Minister noted that RADA and TEF are working to strengthen that and bring more farmers onto the platform. He also mentioned the tourism loan disbursements through the National Export-Import (EXIM) Bank, which have surpassed $1Bn for 2023.
• The Small and Medium Tourism Enterprise (SMTE) loan facility, managed by TEF and facilitated through the EXIM Bank, plays a pivotal role in enhancing the resilience and capacity of SMTEs in the tourism sector.
• This initiative has empowered business operators with access to financing of up to $25Mn at an interest rate of 4.5% for five years.

(Source:  JIS)

• Shareholding directors of Radio Jamaica Limited, trading as RJR on the stock exchange, announced last week that the allocations of shares under the transaction of the amalgamation with 1834 Investments Limited have been effected.
• The move was based on directives given following the court's approval, and the shares will be reflected in changes to their holdings.
• Chairman Joseph Matalon noted that he has elected in respect of himself and two entities controlled by him, that they should have the share entitlements from the scheme of arrangements allotted to ICD Investments Limited.
• A trade was recently made on the Jamaica Stock Exchange amounting to 241,038,117 shares previously held by Mr. Matalon and entities under his control.
• With the realignments and allotments, all shareholders and connected parties remain below the shareholding limit of 21% in the company.

(Source:  RJR News)