• Britain's economy kept up its early 2024 momentum with a survey showing strong growth for services firms and business optimism at a two-year high, but inflation pressures are likely to keep the Bank of England wary about cutting borrowing costs.
• Adding to signs that Britain's shallow recession of last year is likely to be short-lived, the preliminary February S&P Global/CIPS UK Composite Purchasing Managers' Index (PMI), which spans services and manufacturing firms, rose to 53.3, the highest in nine months, from January's 52.9. Economists polled by Reuters had forecast no change from January's reading.
• There were potential areas for concern for the BoE in the survey including strong growth in wages among services firms and Red Sea tensions hitting factory supplies, pushing a measure of price increases by businesses to its highest since July.
• Among services firms, the PMI's headline measure held at 54.3. Manufacturing remained below the no-growth threshold of 50.0 but edged up to 47.1 from 47.0 in January. Chris Williamson, S&P Global Market Intelligence's Chief Business Economist, said the survey pointed to the economy growing by 0.2% or 0.3% in the first three months of 2024 after contracting in the third and fourth quarters of last year.
• That is likely to be a relief for Prime Minister Rishi Sunak who has had to endure taunts of "Rishi's recession" from the opposition Labour Party which is riding high in opinion polls ahead of a national election expected later this year.
• Williamson said the pick-up was being led by demand for financial services amid expectations of imminent rate cuts while manufacturing activity continued to contract and consumer-facing services firms were still battling cost-of-living pressures.

(Source: Reuters)

• The Bank of Jamaica’s (BOJ) Monetary Policy Committee (MPC), at its meetings on 16 and 19 February 2024, unanimously agreed to maintain the policy interest rate at 7.0%. However, the committee decided to further tighten Jamaican dollar liquidity conditions.
• The MPC’s decision was influenced by Jamaica’s elevated headline inflation of 7.4% in January 2024, which drifted further outside the range when compared to December. The inflationary surge reflects the impact of higher regulated prices, including the first of a two-part increase in public passenger vehicle (PPV) fares effective October 2023, the effect of wage increases throughout the economy, as well as high agricultural food prices. Partly offsetting the impact of these factors was a reduction in Jamaica Urban Transit Company fares.
• Given the shocks to headline inflation, core inflation (which excludes food and fuel prices from the Consumer Price Index (CPI)) was 5.9% at January 2024, broadly consistent with the average for 2023, but lower than the 9.7% and 7.1% at January 2022 and January 2023, respectively.
• The longer-term inflation outlook continues to be generally positive. Key drivers of headline inflation, such as inflation expectations and the exchange rate, have remained generally stable. Grain prices have also declined and are projected to continue to fall in the context of buoyant supplies. However, as a result of the above-noted price shocks, inflation is forecasted to remain above the Bank’s target range over the March 2024 and June 2025 quarters.
• The risks to the inflation outlook remain elevated. On the upside, higher-than-projected second-round effects from the PPV fare increases, higher wage adjustments, and a further deterioration in supply chain conditions could influence higher inflation. The factors that could result in lower-than-projected inflation include weaker-than-projected global growth, which could reduce domestic demand, and imported inflation, resulting in lower levels of price changes.
• Future monetary policy decisions will, therefore, continue to depend on incoming data related to the strength of the potential risks to inflation noted above. Importantly, the MPC emphasised that it is prepared to take the necessary actions, including further interest rate increases, if the upside risks to inflation highlighted above materialise. The date of the next policy rate decision announcement is March 29, 2023.

(Source: BOJ)

• Mayaro MP and Opposition spokesperson on trade and industry Rushton Paray says international media outlets have been monitoring the country's response to the Tobago oil spill. In a statement, Paray said the "lacklustre response" has drawn international attention.
• “The recent oil spill disaster in Tobago has drawn widespread attention from international media outlets, shedding light on the Rowley administration's mishandling of the crisis and subsequent lacklustre response”, said Paray.
• He asserted that international media identified the issue as a catastrophe days before Prime Minister Dr Keith Rowley visited the island on February 11 - the incident had first been reported to the Tobago Emergency Management Agency (TEMA) on February 7.
• Furthermore, he noted that Dr Rowley lacked concrete answers to pertinent inquiries or a clear timeline for the cleanup efforts even upon visiting the incident. He went on to say, "Numerous foreign news agencies have criticised the government's slow and inadequate reaction to the emergency, highlighting its failure to swiftly contain the spill and hold those responsible to account.”
• Since the disaster volunteers have come forward to assist with clean-up operations following reports of the spill - the vessel, now identified as the Gulfstream, was reportedly being tugged to Guyana when it overturned. 

(Sources: Trinidad and Tobago Loop News)

• Maintaining that all developments are being done within Guyana’s territory, President Dr Irfaan Ali has reassured investors that they need not worry because it is clear where Guyana’s borders are.
• During an interview with Bloomberg on Tuesday, February 20, the President again rejected the Bolivarian Republic of Venezuela’s spurious claim over Guyana’s territory.
• According to Dr Ali “The greatest assurance that we can offer is that Guyana is sure of its territorial integrity, we are sure of our borders and in 1899, our borders were settled. Venezuela participated in the settlement of those borders. So, there is absolutely no doubt as to where our borders are.”
• Dr Ali further noted that the matter is currently before the International Court of Justice (ICJ) and that Guyana has fully submitted itself to international law. “We are a country that respects the rule of law. We are a country that abides by international law, and that is why we respectfully ask Venezuela to participate and be a responsible member of the international community and to respect the outcome of the ICJ.”, Ali said.
• Dr Ali stated that the nation is partnering with many countries both regionally and internationally. He made note of CARICOM’s support for its territorial integrity along with support from Brazil, France, Canada, the UK, and most of the international community.
• Finally, he stated that Guyana is working with Venezuela now and through CARICOM to ensure that the situation does not escalate, given that Guyana’s primary focus is to ensure that the region remains stable and peaceful. This is also reinforced by the Argyle Declaration agreed upon by Venezuela and Guyana, following a meeting between both nations’ Presidents brokered by CARICOM, CELAC, and Brazil.

(Source: Guyana Chronicle)

• Policymakers at the Federal Reserve are cautious about the risks of cutting interest rates too soon, emphasizing uncertainty about the appropriate duration of current borrowing costs.
• Participants highlight uncertainty about maintaining a restrictive monetary policy to reach the Fed's 2% inflation target. While most warn against quick easing, some note risks of an overly restrictive stance.
• The minutes seemed to reinforce the recent message of Fed policymakers that they would be in no hurry to deliver on rate cuts, stressing the need for greater confidence in falling inflation before rate cuts can commence. Still, investors anticipate rate cuts in June.
• The rapid easing in financial conditions during the fourth quarter, after the Fed began signaling that its rate hikes were likely over, had largely run its course by the time officials gathered at the end of January. Since then, the picture has been mixed: Treasury yields have increased by more than a quarter of a percentage point, bringing an end for the time being to a decline in consumer and corporate borrowing costs, but stocks have continued to march to record highs.
• Given what seemed to be falling inflation on the horizon, Ryan Sweet, chief U.S. economist at Oxford Economics, said the concern of Fed policymakers about cutting rates too soon "seems odd," and suggested that risks may be tilting towards overly tight policy beginning to weigh on the economy.
• "If the central bank waits for clear signs that the labour market, or the broader economy, is deteriorating, they will be behind the curve," Sweet wrote. "This could turn a 'soft landing' into a bumpier one."

 (Source: Reuters)

• Japan's government downgraded its view on the economy in February, the first downgrade since November 2023. The downgrade is attributed to sluggish consumer spending, slow wage recovery, and lackluster industrial output.
• The government also slashed its assessment of consumer spending for the first time in two years, stating that the pickup seems to be "stalling." Japan's economy unexpectedly slipped into recession in the fourth quarter of 2023, losing its position as the world's third-largest economy to Germany.
• The nation's real wages fell for 21 straight months in December, impacting household spending due to inflation outpacing wage recovery. The government cut its view on industrial output for the first time since March 2023, citing a production stoppage at Toyota Motor's small-car unit Daihatsu over safety issues.
• Recovery in capital spending is also "stalling" due to firms' solid capital spending plans not being realized, partly because of a labour shortage.
• The government highlighted the need to pay "full attention" to the impact of an earthquake in Japan's Noto peninsula on New Year's Day, which killed about 240 people. Analysts believe the earthquake will have only a small short-term impact on the economy.

(Source: Reuters)

• A 45.4% (or $1.09Bn) deterioration in net operating revenue saw Barita Investments Ltd. (BIL) reporting net profit of $479.32Mn (EPS: $0.40) for its first quarter of the FY 2023-24 financial year, a 55.2% contraction relative to prior year.
• Reductions in net interest income (-33.4% or $73.6Mn), gain on investment activities (-78.0% or $1.15Bn), and foreign exchange trading losses (-$7.43Mn), all outweighed the +22.9% growth in fees and commission income resulting in the falloff in operating revenue.
• Amidst the background of the falloff in revenues, operating expenses were well contained, falling by 35.8% (or $387.06Mn), reflecting a reduction in administration costs (39.5%) and reversals of expected credit loss (ECL) charges. However, the results were moderated by a +22.8% increase in staff costs primarily due to one-off separation expenses related to restructuring.
• Despite the improvement in indirect costs during the period, the operating expenses margin rose by 7.86 percentage points to 52.6%, as the contraction in operating revenues (-45.4%) outpaced the improvement in operating expenses (-35.8%).
• Barita attributed the decline in earnings to the ongoing impact of higher central bank interest rates, which led to tight money market liquidity and increased market volatility. The company anticipates that a turnaround in the monetary policy environment beginning in 2024 into 2025 will result in more positive tailwinds for its performance over the next couple of quarters.
• BIL’s stock price fell by 24.2% in 2023 and has declined a further 3.6% since the start of the year, closing Tuesday’s trading session at $71.40. At this price, the stock currently trades at a P/E of 30.25x earnings, which is above the Main Market Financial Sector Average of 12.03x.

 (Sources: Company Financials and NCBCM Research)

• Another request for a proposal for a further 168 megawatts of renewable energy will be launched in the new fiscal year, which begins on April 1. This is in addition to the supply of up to 100 megawatts of electricity generation, for which the Generation Procurement Entity invited tenders last September.
• The disclosure was made by Governor-General, His Excellency the Most Hon. Sir Patrick Allen, as he delivered the Throne Speech to open the 2024/25 Parliamentary Year in Gordon House on Thursday (February 15).
• The Governor-General said the Government continues to develop policies that will contribute to reducing Jamaica’s energy intensity and carbon footprint while advancing the adoption of new technologies.
• The policy and guidelines for energy efficiency and conservation in public facilities, particularly for schools and hospitals, and the electric vehicle policy were tabled in Parliament in June 2023.
• Efforts to diversify energy sources for public passenger vehicles for the Jamaica Urban Transit Company (JUTC) received a major boost with the acquisition of five battery electric buses, as well as 20 compressed natural gas (CNG)-fueled buses.
• Jamaica’s target for the share of renewable energy in the total grid-connected capacity mix is 50% by 2030.  The current installed capacity reaches 1,041MW, of which 83% is thermal, primarily natural gas, and the remainder is renewables (wind, hydro, and solar).

(Source: JIS)

• Under the leadership of the Honourable Dr. Terrance Drew-led administration, St. Kitts and Nevis has made significant advancements in the tourism sector during the 2023-2024 season.
• Permanent Secretary in the Ministry of Tourism, Tivanna Wharton said that substantial progress has been achieved, with notable developments and initiatives implemented to bolster the tourism industry of the nation.
• During the radio and television show ‘InFocus’ on February 14, 2024, Ms. Wharton stated that last year, the stayover visitors were approximately 133,000, noting that “this again suggests that we are well on the way to pre-COVID numbers, which is our benchmark at this time.” She continued that this success is a reflection of the work that is being done under the current administration.
• Further, Senior Minister and Minister of Economic Development and Investment, the Right Honourable Dr Denzil Douglas, during the Prime Minister's Press Conference at the NEMA Conference Room on February 13, announced the expansion of the nation’s tourism and hospitality sector through a major investment by Troy Property Investment Limited.
• Highlighting the government’s ongoing efforts to attract new investments and expand the economy, the minister underscored the recent groundbreaking for the newest addition to the country’s hospitality sector, Hotel Indigo. This development, Dr Douglas said, is set to take a step further with Troy Property Investment Limited’s plans to enhance the hotel’s offerings.
• The government of St. Kitts and Nevis remains dedicated to fostering a conducive environment for investment and development, ensuring that the twin-island nation continues to thrive as a premier destination in the Caribbean for both tourists and investors alike.

(Source: SKN Vibes)

• Mexico's headline inflation rate likely eased in the first half of February, a Reuters poll showed on Monday, reinforcing bets that the country's central bank could soon lower its key benchmark interest rate for the first time since 2021.
• A median forecast of 13 analysts predicted that the annual headline inflation rate would settle at 4.70% for the first 15 days of the month, which would mark the continuation of a downward trend that was briefly interrupted at the end of last year.
• The expected rate of rising consumer prices; however, still hovers above the central bank's target of 3%, plus or minus 1 percentage point. The closely watched core inflation index, which strips out volatile energy and food prices, is seen falling to 4.67% in early February, its lowest level since July 2021.
• The Bank of Mexico's five-member board held the benchmark interest rate at 11.25% for a seventh straight time in the last meeting, while hinting a rate cut could be considered during upcoming meetings.
• The central bank, known as Banxico, began a rate hiking cycle in June 2021, but it has held the key borrowing rate at its current record-high level since last March.

(Source: Reuters)