• The International Monetary Fund (IMF) on Tuesday, May 16, said it "strongly supports" Brazil's efforts to improve the country's fiscal position, while also commending the country's "ambitious agenda" to have a sustainable, inclusive, and green economy.
• "Enhancing Brazil's fiscal framework, broadening the tax base, and tackling spending rigidities would support sustainability and credibility," the leader of an annual mission to the country, Ana Corbacho, said in a statement after the Fund's visit.
• Brazil's finance ministry in late March unveiled new fiscal rules to balance limits on spending growth under the administration of President Luiz Inacio Lula da Silva, who has vowed to boost social programmes and public investment.
• The new rules limit spending growth to 70% of Brazil's revenue growth in the prior 12 months. The government's proposed fiscal framework also targets a zero primary deficit in 2024, from a deficit of 1.0% in 2023, followed by a primary surplus equal to 0.5% of GDP in 2025 and 1% of GDP in 2026. Additionally, Brazilian lawmaker Claudio Cajado on Monday presented a revised version of the government's bill to ensure the rules have penalties in case of non-compliance by the government.
• IMF "staff recommends a more ambitious fiscal effort that continues beyond 2026 to put debt on a firmly declining path while protecting social and investment spending," Corbacho added in the statement.

(Source: Reuters)

• Coverage, especially in rural areas, and affordability are some of the issues that need to be addressed to achieve an efficient digital economy within the region. This was revealed by Francisco Soto, Huawei’s chief expert in Wireless Solutions, Latin America, and the Caribbean, who said the digital economy brings with it several opportunities, but also new challenges and rules of the game in the global market.
• Soto pointed out that the positioning of the country on the global stage largely depends on its ability to adapt to new conditions. He noted that the digital economy brings a new set of benefits, which can make it possible to reduce the differences that exist between rich and poor nations.
• “Developing countries have the opportunity to transform their economy and to contribute to the development of the digital economy. Although these economies are characterised by high added value, faced with numerous obstacles, many developing countries cannot adequately respond to the demands of the digital economy,” Soto disclosed to the Express Business last week.
• Also, he said inadequate access to the latest technology, sophisticated telecommunications infrastructure, low computer literacy as well as numerous cultural and socio-economic factors are just some of the challenges that developing countries have to face.
• A report from Global System for Mobile Communications Association (GSMA) on Digital inclusion in Latin America and the Caribbean which was published on its website a few years ago showed that Latin America and the Caribbean have the highest regional level of income inequality in the world.
• Affordability is a big barrier to Internet adoption for people at the bottom of the economic pyramid. For the bottom 40 per cent of the population, the cost of mobile ownership is on average 17 per cent of income. This the report said compares to just two per cent of income for the top 20 per cent of the population. The report identified that effective collaboration between the government and mobile operators is necessary to overcome the barriers to digital inclusion.

(Source: Trinidad Express Newspapers)

• The number of Americans filing new claims for unemployment benefits fell more than expected last week, with applications in Massachusetts decreasing sharply, suggesting the labour market remains tight.
• The steep decline in weekly jobless claims reported by the Labor Department on Thursday reversed the surge in the prior week, which had boosted them to the highest level since Oct. 30, 2021. That increase was largely blamed on an unusual jump in applications for unemployment insurance in Massachusetts.
• The state's Department of Unemployment Assistance said last week it was "experiencing an increase in fraudulent claim activities in which people attempted to gain access to active UI accounts or file new UI claims using stolen personal information so they can fraudulently obtain unemployment benefits."
• "The labour market is not deteriorating like we had thought as jobless claims were pumped up to recession levels by fraudulent applications for unemployment benefits," said Christopher Rupkey, chief economist at FWDBONDS in New York.
• Initial claims for state unemployment benefits declined 22,000 to a seasonally adjusted 242,000 for the week ended May 13. The drop was the largest since Nov. 20, 2021. Economists polled by Reuters had forecast 254,000 for the latest week.
• The labour market is being closely watched for signs of stress from the Federal Reserve's fastest monetary policy tightening campaign since the 1980s. The U.S. central bank is expected to keep interest rates unchanged next month for the first time since it started hiking them in March 2022.

(Source: Reuters)

• President Joe Biden sounds optimistic about the odds of reaching a deal with Republicans to raise or suspend the debt limit in time to avoid economic fallout from even a potential U.S. debt default. “I really think there’s a desire on their part, as well as ours, to reach an agreement, and I think we’ll be able to do it,” Biden told reporters Sunday in Delaware. As to his state of mind, he said, “I remain optimistic because I’m a congenital optimist.”
• Biden also characterized the talks underway between White House liaisons and congressional aides as “a negotiation,” a notable choice of words after months of insisting he would not “negotiate” over the debt limit. The president and the top four congressional leaders plan to meet again about the debt ceiling Tuesday.
• Biden’s remarks followed the postponement of a White House meeting, originally set for Friday. The White House said the three-day delay should be viewed as a sign of progress in the talks. “The meetings have been productive over the past few days and leaders wanted to continue before they regrouped,” White House press secretary Karine Jean-Pierre said Friday.
• Not everyone involved in the talks has such a sunny outlook, however, as House Speaker Kevin McCarthy told NBC News on Monday that he thinks they are still far apart and that it doesn’t seem yet that they want a deal. “It seems like they want to look like they’re in a meeting,” said McCarthy. “They’re not talking about anything serious.”
• Democrats have spent months blasting House Republicans’ proposal, which demands sweeping cuts to federal spending in exchange for agreeing to pass a debt limit hike. Just last Thursday, Biden accused the House GOP of “holding our economy hostage.” Against this backdrop of months of bitter partisan attacks, Biden’s sudden shift in tone Sunday was striking.
• Investors are watching how the negotiations unfold. Stocks declined Monday morning as the market chewed over the comments from Biden and McCarthy.

(Source: CNBC)

• The almost $200-million expansion of Best Dressed Chicken’s Cumberland Hatchery in Portmore is being hailed by Minister of Agriculture and Fisheries, Hon. Pearnel Charles Jr., as a major boost for the agriculture sector. The expansion increases the hatchery’s capacity by 70 per cent, allowing the company to better meet the demands of the local market and, particularly, small poultry farmers, by ensuring a steady supply of baby chicks.
• Speaking at the reopening ceremony on Wednesday (May 10), Minister Charles Jr., said the Jamaica Broilers Group, which is the parent organization of Best Dressed Chicken, continues to be a “primary strategic partner” with a “long and rich history” of assisting small farmers across Jamaica. For his part, Group President and Chief Executive Officer of the Jamaica Broilers Group, Christopher Levy, said that the upgrade is an investment in the small farmers of the country, who represent 30 per cent of the production of poultry meat in Jamaica.
• Mr. Levy said that the small poultry farmers are the country’s first line of defence against imported poultry, and the recent investment in the Cumberland Hatchery is to bring the company “up to amazing standards”. Furthermore, he outlined that the move is hoped to instill greater confidence in the poultry sector and spur other investments.
• The increased capacity provided by the Cumberland hatchery will help shore up the local supply of baby chicks going to small farmers - a critical part of the sector, especially as Jamaica is looking to reduce poultry imports. This will also be good for JBG in terms of sales thereby boosting bottom-line growth.

(Source: JIS News)

• At a destination press briefing held at the 41st Caribbean Hotel & Tourism Association (CHTA) Caribbean Travel Marketplace in Barbados, Minister of Tourism the Hon. Edmund Bartlett announced that Jamaica has surpassed one million visitor arrivals year-to-date for 2023, reaching this milestone approximately one month earlier than in 2022.
• He noted that from January through December 2022 Jamaica welcomed 2,478,386 stopover arrivals, a 69.2% increase over 2021 and nearly a full recovery to 2019 highs. The projections ahead for 2023 through 2025, are that the country will attract more than 3.8 million visitors in 2023 and grow to more than 5 million visitors in 2025.
• In order to keep this growth on an upward trajectory, the country continues to build out new air service with new flights this year from Chicago Midway, Denver, St. Louis, Dallas, Kansas City, and London Gatwick.  It is also expanding and modernizing Sangster International Airport and has approximately 8,000 new hotel rooms slated for construction over the next two to five years. 
• The resurgence of the tourism industry has been the main driver of economic growth. The benefits are expected to continue as investments are being made and partnerships are being formed to boost the growth of the industry and by extension Jamaica.

(Source: JIS)

• After the Banco Central de Chile (BCC) decided to hold its policy rate at 11.25% at its May 12 meeting, Fitch continues to expect the rate will remain on hold through H123 as inflation – though slowing – remains far above the bank’s target.
• This was the fourth-consecutive hold and came in a unanimous vote. The accompanying statement underlined that the Chilean economy has continued to cool (though the bank removed the statement that the economy was adjusting slower than expected), while headline and core inflation and medium-term inflation expectations all remain above the bank’s 3.0% target.
• Additionally, the bank reiterated that it “considers it appropriate to maintain the policy rate at 11.25% until the state of the macroeconomy indicates that inflation is converging to the 3% target.” The bank did not offer clear forward guidance, but the tone of the announcement did not suggest an imminent change in stance, according to Fitch.
• It is anticipated that the bank will begin cutting rates in H223 as disinflation continues and the US Fed goes on hold, though Fitch has revised its end-2023 forecast up from 7.75% to 8.25% as economic activity appears somewhat stronger than anticipated.
• Risks to Fitch’s forecast are slightly to the upside, as a stronger economic performance could lead to a slower deceleration in price growth and fewer rate cuts than expected given concerns that fast rate cuts could reignite inflationary pressures.

(Source: Fitch Solutions)

• Brazil, the world's top chicken exporter, has for the first time confirmed Highly Pathogenic Avian Influenza (HPAI) cases but only in wild birds, the Agriculture Ministry said on Monday, May 15.
• Two cases were detected in wild birds and should not trigger a ban on imports of Brazilian poultry products as per guidelines from the World Organization for Animal Health (WOAH), according to the Brazilian government.
• The avian influenza virus can kill entire flocks of birds and cause losses for the farming sector. Brazil's chicken exports rose by 27% last year to $9.76 billion as other countries reeled from a global outbreak of the virus, yet the South American country had never registered a case until now.
• Epidemiological surveillance services will be intensified to detect potential cases in wild and commercial animals in the area close to where the cases were confirmed, a government source said.
• The agriculture ministry said that because the cases were detected in wild animals, Brazil's status "as a country free of HPAI" was not affected.
• Notably, Brazil's neighbour Argentina suspended its poultry exports in late February after recording the first case of bird flu in its poultry industry in the southern Rio Negro province but resumed exports from bird flu-free areas in late March.
• As these developments continue to unravel, the possibility exists that other forms of protein such as Mutton or Beef, will experience increased demand as consumers shift from poultry and seek other alternatives. This bodes well for producers of alternative forms of protein such as Marfrig.

(Source: Reuters)

• U.S. retail sales increased less than expected in April, rising by 0.4% with some Economists forecasting sales rebounding by 0.8%. The underlying trend was solid, suggesting that consumer spending got off to a strong start in the second quarter, defying expectations of a recession this year.
• The smaller-than-expected rebound in retail sales last month reported by the Commerce Department on Tuesday likely reflected a moderate rise in receipts at auto dealerships, which some economists have said was because of lower prices. Receipts at auto dealers rose 0.4% after back-to-back decreases. "That adds to the signs that vehicle prices are now falling, weighing on the nominal value of sales," said Andrew Hunter, deputy chief Economist at Capital Economics.
• Nevertheless, higher borrowing costs and prices are taking a toll on consumers with sales at building material and garden equipment supplies dealers marginally increasing by 0.5% and online retail sales surging by 1.2%, likely due to price-conscious consumers continuing to seek discounts and deals.
• The rise in retail sales added to strong job growth in April suggesting that the economy was experiencing a spring revival after activity slowed in February and March. Spending is being underpinned by strong wage gains due to a tight labour market.
• "Outright declines in spending will be needed in the remaining two months of the second quarter to spur a contraction in real personal consumption," said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. "This risks another delay in the long-awaited recession, likely due to ongoing revenge spending, excess savings, and sturdy income growth."

(Source: Reuters)

• China's April industrial output and retail sales growth undershot forecasts, suggesting the economy lost momentum at the beginning of the second quarter intensifying pressure on policymakers to shore up a wobbly post-COVID recovery.
• Tuesday's batch of data, also showed a further decline in property investment which adds to concerns about the outlook for the world's second-biggest economy as both its domestic and export engines of growth remain underpowered.
• "Today's weaker-than-expected data show how difficult it is to keep the growth engine running after restarting it," said Bruce Pang, chief economist at Jones Lang Lasalle. Nomura economists took an even dimmer view: "As disappointment kicks in, we see a rising risk of a downward spiral, resulting in weaker activity data, rising unemployment, persistent disinflation, falling market interest rates and a weaker currency." "Year-over-year growth in Q2 may still look elevated, thanks to a low base, but sequential growth could experience a material decline," they said.
• Other data over the past week showing shrinking imports in April, deepening factory-gate deflation and worse-than-expected bank loans signalled weak domestic demand, raising pressures on policymakers to shore up the economic recovery as global growth falters. China's central bank kept the interest rate unchanged on Monday as expected, but markets are betting on more monetary easing in the coming months as the commodities data also highlighted pockets of weakness across the economy.

(Source: Reuters)