• The Government of Jamaica (GOJ) remains committed to the growth and development of the micro, small, and medium-sized enterprise (MSME) sector, which continues to play a pivotal role in the country’s economy, says the Minister with responsibility for Information, Skills, and Digital Transformation, Senator Dr. the Hon. Dana Morris Dixon.
• With more than 422,000 MSMEs in operation, it was highlighted that these enterprises are undoubtedly the backbone of Jamaica's economy. They employ 60% to 70% of the workforce and account for over 90% of private-sector employment. "Your businesses are the ones building our nation. Your businesses have the power to propel Jamaica forward," she stated. 
• Morris Dixon addressed the graduation ceremony for 350 operators in the MSME sector who took part in the Wisynco/Coca-Cola Foundation 'Growing Together' initiative. This event occurred at The Ruins, University of the West Indies (UWI) Mona, on May 25.
• Owners of corner shops, wholesale outlets, groceries, and supermarkets operating within Wisynco’s network have benefited from a complimentary online business management course. Topics covered included inclusion and personal growth, managing your business, digitalisation of the business, electronic payments, WhatsApp business, inventory and financial health.
• "This is certainly a bold and visionary advancement for our community and economy. It demonstrates the Wisynco Group's dedication to its partners and the MSME sector. The graduates were not required to pay a fee or travel to distant classrooms; they could learn at their convenience. Hence, the Growing Together initiative is commendable and deserves praise," she stated

 (Source: JIS)

• The rainy season officially started for the Panama Canal on May 7, which has begun to be reflected little by little in the level of lakes Gatún and Alajuela. This is important news for the country. The serious drought, a product of the El Niño phenomenon, forced the interoceanic waterway to apply drastic measures, reducing the daily traffic of ships to only allow, at one time, the passage of 24 ships.
• The Panama Canal welcomed more ships per day in May, signalling a slow return to normalcy and a wider sigh of relief for shippers hoping for an end to transit restrictions that have been in place since last summer.
• According to the Panama Canal Authority (ACP), as many as 32 ships will be allowed to reserve a spot to sail through the waterway by June based on the present and projected level of the manmade Gatún Lake, which was heavily impacted by a months-long drought during Panama’s May-to-November rainy season last year.
• Clarksons Research said in an analysis earlier this month that total transits in the canal are still down by 30% compared to a year prior. Under normal circumstances, 36 to 38 vessels are allowed to be booked to transit the Panama Canal per day.
• With the country’s dry season coming to an end this month, the ACP has already been easing restrictions that were originally put in place throughout the second half of 2023, most recently increasing the number of daily reservations allowed from 24 to 27. With the completion of the maintenance, this number increased again to 31 per day across both the original Panamax locks (24 vessels) and the newer Neopanamax locks (seven vessels). Additionally, an extra slot will open in the Neopanamax locks starting June 1, with crossings expected to remain at 32 per day until further notice.
• Finally, to prevent a repeat of last year’s events, in March, Panama’s Council of Ministers unveiled the creation of a Multimodal Dry Canal project to speed up the movement of goods and improve clearance times. As part of the project, the country would integrate existing roads, railways, port facilities, airports, logistics warehouses and duty-free zones to create a new special customs jurisdiction to provide a dry route as an alternative to the roughly 50-mile waterway.
• Maersk (shipping and logistics company) debuted a similar “land bridge” service to kick off 2024, bypassing the canal on one of its trade routes amid the shipping delays posed by the transit restrictions. As part of the service, the company would split its Oceania-to-the-Americas route into two loops on each side of the canal, where cargo would be dropped off at a port before being transported to the other side via rail and picked up by a ship.

(Source: Newsroom Panama)

• Fitch Solutions expects Trinidad & Tobago’s (T&T) current account surplus to narrow from 12.0% of GDP in 2023 to 11.0% of GDP this year, largely reflecting increased import demand as the economy performs well.
• In recent years, T&T has benefitted from a notable rebound in global energy prices, linked to the emergence of supply concerns stemming from sanctions implemented on Russia (the world’s third-largest oil producer and second-largest natural gas producer) and ongoing unrest in the Middle East.
• This has acted as a windfall for T&T, given oil (20%) and natural gas (65%, including derived products such as ammonia and methanol) account for the bulk of goods exports. The run-up in prices has helped to more than offset weakness in production, following years of underinvestment.
• Risks to external stability are contained given the healthy current account position. However, restrictions on access to foreign exchange will likely continue to create issues for small businesses.

(Source: Fitch Solutions)

• The European Central Bank (ECB) has room to cut interest rates as inflation slows but must take its time in easing policy, even if the direction of travel is already clear, key policymakers said on Monday.
• The ECB has all but promised a rate cut for June 6, so the debate has shifted to subsequent moves and the speed at which they come. Markets have dialled back their expectations to bet on just one more cut this year.
• "Barring a surprise, the first rate cut in June is a done deal, but afterwards we have several degrees of freedom," French central bank chief Francois Villeroy de Galhau told Germany's Boersen Zeitung. ECB chief economist Philip Lane took a more measured stance but warned that easing too late risked pushing inflation below target, which would then force the ECB to rush with rate cuts.
• "Keeping rates overly restrictive for too long could push inflation below target over the medium term," Lane said in a speech in Dublin. "This would require corrective action through a subsequent acceleration in rate cuts that could even require having to descend to below-neutral levels."
• Markets currently see just one more rate cut this year after the initial move in June, a big reversal compared with the start of the year, when up to six cuts were expected. Still, Lane insisted that disinflation was on track and even if price growth figures could be choppy in the coming months, trends remained in line with the bank's projections that put inflation back at the ECB's 2% target in 2025.

 (Source: Reuters)

• New orders for key U.S. manufactured capital goods rebounded more than expected in April and shipments of those goods also increased, suggesting a moderate improvement in business spending on equipment early in the second quarter.
• Nonetheless, business investment in equipment continues to be hamstrung by higher borrowing costs. That, together with a strong dollar and weak global demand, is keeping manufacturing, which accounts for 10.4% of the economy, on the ropes.
• "Despite elevated borrowing costs and stricter loan standards, U.S. business investment could pick up in the second quarter," said Sal Guatieri, a senior economist at BMO Capital Markets. "However, the manufacturing sector, as a whole, is expected to remain in low gear until interest rates ease, the greenback weakens, and the global economy strengthens."
• Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rose 0.3% last month after an upwardly revised 0.1% dip in March, the Commerce Department's Census Bureau said on Friday. Economists polled by Reuters had forecast these so-called capital goods orders would edge up 0.1% after declining by a previously reported 0.2% in March.
• The government last week revised the orders, shipments and inventory data from January 2012 through March 2024 after an annual review of the seasonal adjustment models, which it uses to strip seasonal fluctuations from the numbers. The revision did not affect the core capital goods orders that jumped 1.2% on a year-on-year basis in April.
• Shipments increased 0.4% after a 0.3% drop in March. Non-defense capital goods orders fell 1.5% in April after advancing 1.3% in the prior month. Shipments of these goods rose 2.4% after dropping 1.5% in March.
• These shipments go into the calculation of the business spending on equipment component in the gross domestic product report. They were partially flattered by higher prices, which could lessen the boost to GDP. Business spending on equipment rebounded marginally in the first quarter after two straight quarterly declines, making a small contribution to the economy's 1.6% growth pace.

(Source: Reuters)

• The Jamaica Stock Exchange (JSE) has been working closely with its stakeholders over the past six months to implement the T+1 settlement cycle, culminating in a final meeting with brokers and listed companies.
• The official announcement was made on May 20, 2024, regarding significant changes to its settlement cycle and trading hours, which will take effect on Monday, May 27, 2024. On that day, the settlement cycle for transactions will be shortened from trading plus two additional business days (T+2) to one business day after trading (T+1).
• Additionally, the stock market’s trading hours will be extended from 3 ½ to 5 hours. Trading will now commence at 9:00 a.m. and close at 2:00 p.m., giving traders an additional 1 ½ hours to trade securities.
• Marlene Street Forrest, Managing Director of the Jamaica Stock Exchange, noted that these are the measures the JSE and the Jamaica Central Securities Depository (JCSD) are taking to improve the market for the benefit of investors, reduce market risks, and enhance market activities and liquidity.
• Street Forrest further explained, “We are attentive to the needs of our investors, listed companies, brokers, and other stakeholders, and we respond to enhance our market’s advantages. We strive to align with global best practices and provide opportunities for growth.”
• Althea Daley of the JCSD, elaborated on the T+1 implementation, highlighting that the settlement cycle is required to finalise a trade and deliver funds and securities. In a T+1 settlement cycle, a trade becomes final on the next business day following the trade date, “T.
• Some of the benefits she added include; the harmonisation with major markets internationally and counterparties, for example, the USA and Canada, quicker receipt of cash/securities for investors, reduction of JCSD’s credit and settlement risk, operational process improvements, increased market liquidity and reduced foreign exchange risk in USD transactions.

 (Source: JSE)

• The Bank of Jamaica (BOJ) is developing a central electronic database with Know Your Customer (KYC) information aimed at making it easier for clients to switch banks.
• Addressing the BOJ’s Quarterly Monetary Policy Press Conference on Tuesday (May 21), Central Bank Governor Richard Byles disclosed that 60% of deposits reside in two of Jamaica’s 11 deposit-taking institutions. He underscored that competition can be created by introducing new players in the sector or making it easier for customers of any bank to move their accounts.
• Byles said that at present, opening an account is a difficult and lengthy process due to the anti-money laundering and combatting the financing of terrorism (AML/CFT) policies in place. “In 18 to 24 months, we hope to have this in effect. The World Bank is working with us on it, but it’s going to take a lot of cooperation between ourselves and the commercial banks. What we’re going to be saying to them is that you need to take all of your data on every customer, and there are hundreds of thousands of customers, and put that data into this depository,” he added.
• Byles said banks will need to be assured that their customers’ data will be safe, secure, accessible and not open to cyberattacks, and “so any central depository will have to be like Fort Knox”. Fort Knox is the commonly used name for the United States Bullion Depository, which is a fortified vault building adjacent to the Fort Knox Army Post in the state of Kentucky. It is operated by the United States Department of Treasury and stores more than half of the country’s gold reserves.
• Meanwhile, BOJ Deputy Governor Dr. Jide Lewis shared that with very few documents, a customer should be able to enter any banking hall and have their identity digitally verified. “POCA, which is the Proceeds of Crime Act, was recently amended to allow banks to share KYC information. What this registry would do is just create a digital mechanism”, he added.

(Source: JIS)

• According to an International Institute for Sustainable Development (IISD) Comprehensive Wealth report titled “Trinidad and Tobago Moving Beyond GDP to promote sustainability, resilience, and well-being”, the compilation of comprehensive wealth measures for Trinidad and Tobago reveals unsettling trends that gross domestic product (GDP) does not.
• While GDP growth suggests sound economic development from 1995 to 2020, comprehensive wealth paints a picture of moderate progress at best and suggests the country is on an unsustainable path, according to the report. Over the period 1995–2020, real (inflation-adjusted) per capita GDP more than doubled. Real comprehensive wealth per capita, on the other hand, increased much less, growing by only 11%.
• Following the 2008 global recession, real comprehensive wealth per capita began a worryingly steady decline to 2020, falling 3.6% annually on average. Such a long and substantial decline in wealth is unprecedented for a high-income country. It signals unsustainability in Trinidad and Tobago’s development trajectory, which is not apparent in the country’s GDP figures.
• Real GDP per capita, in contrast, held steady well after 2008, beginning to fall only in 2014. This was a full 5 years after real wealth per capita began its decline.
• Today, leaders worldwide, including the United Nations Secretary-General, the G7 (Government of Canada, 2019), the Organisation for Economic Co-operation and Development, and the World Economic Forum, are calling on countries to move beyond GDP and start measuring what truly matters for prosperity. The United Nations Secretary-General, in particular, is strongly urging nations to adopt measures of progress that go beyond GDP, recommending comprehensive wealth as one valid approach for doing so.
• A nation’s comprehensive wealth portfolio determines the prospects for citizens’ well-being. It involves elements such as produced capital, natural capital, human capital, financial capital, and social capital. The consumption of the goods and services produced by combining these various types of capital is an important driver of well-being for individuals and for nations as a whole, given that consumption of goods and services accounts for a great deal of what matters to people: nourishment, shelter, safety, health, leisure, and many other forms of self-fulfilment.

(Source: International Institute for Sustainable Development)

• In a significant boost to the country’s energy infrastructure, the 36- megawatt power ship has reached its maximum operational capacity almost two weeks after being connected to the national grid.
• The Guyana Power and Light (GPL) announced on Saturday that the power ship incrementally increased its generation output to 36 megawatts (MW) to the Demerara-Berbice Interconnected System (DBIS) located at Everton, Region Six (East Berbice-Corentyne).
• “A capacity test was completed today, confirming the power ship is now at its maximum capacity of 36 MW. This significant boost in generation has resulted in a reduction in service interruptions,” the power company said.
• This milestone highlights the successful integration of this floating vessel into Guyana’s national grid, ensuring a stable and reliable electricity supply for the population. The vessel began supplying the grid with 18 MW just over a week ago.
• This addition is expected to alleviate the pressure on the national grid, particularly during peak consumption hours, and reduce the frequent power outages that have plagued various regions across the country.
• On April 13, GPL signed a contract with Urbacon Concessions Investments, W.L.L (UCI) to charter the power ship for a period of two years, with US$1Mn paid as a mobilisation fee. The power ship which arrived in Guyana on May 1st, operated in Cuba and has two engines which produce 18.5 megawatts each. Moreover, it will operate at a remarkable 96% availability and is integrated into GPL’s grid at 69 kilovolts (kV).

(Source: Guyana Chronicle)

• Businesses across the globe broadly enjoyed an improved performance this month with activity picking up in the United States and across parts of Asia and Europe, surveys showed on Thursday, giving central banks room to potentially defer cutting interest rates.
• Borrowing costs were raised following the COVID-19 pandemic to combat rampant inflation, but talk has now turned to how soon - and by how much - they will fall, particularly in countries where voters go to the polls this year. Elections are currently being held in India, the United States goes to the polls in November, and on Wednesday British Prime Minister Rishi Sunak called a national election for July 4.
• The global economy is likely to carry its solid momentum for the rest of the year and into 2025, defying earlier expectations of a slowdown, according to an April Reuters poll of economists who said stronger growth than forecast was more likely than weakness. U.S. business activity accelerated to the highest level in just over two years in May, suggesting that economic growth picked up half-way through the second quarter.
• S&P Global said on Thursday that its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, jumped to 54.4 this month. That was the highest level since April 2022 and followed a final reading of 51.3 in April.
• A reading above 50 indicates expansion in the private sector. Economists polled by Reuters had forecast the index little changed at 51.1. The increase was driven by the services sector, with the flash PMI rising to 54.8 from 51.3 in April. The manufacturing flash PMI inched up to 50.9 from 50.0.
• However, manufacturers reported a surge in prices for a range of inputs, suggesting that goods inflation could pick up in the months ahead, in a worrying sign for the Federal Reserve as it waits for more confidence inflation has resumed a downward path before commencing rate cuts.
• "The main inflationary impetus is now coming from manufacturing rather than services, meaning rates of inflation for costs and selling prices are now somewhat elevated by pre-pandemic standards in both sectors to suggest that the final mile down to the Federal Reserve's 2% target still seems elusive," said Chris Williamson, chief business economist at S&P Global Market Intelligence.

(Source: Reuters)