• The Brent crude market structure and some physical markets in Europe and Africa reflect tighter supply, resulting partly from concern about shipping delays due to vessels avoiding the Red Sea, according to traders, LSEG data, and analysts.
• Disruptions, alongside outages and heightened Chinese demand, amplify competition for crude supply not transiting the Suez Canal. European markets are notably affected, as disruptions prompt diversions from the Red Sea following airstrikes in Yemen by the United States and Britain.
• Brent crude futures exhibit heightened bullishness, with the first-month contract premium over the six-month contract reaching $2.15 a barrel. European refiners face the most significant impact on the physical front, with a notable decrease in Middle Eastern crude heading to Europe.

(Source: The Daily Star)

• The Statistical Institute of Jamaica (STATIN) reported that the unemployment rate in October 2023 was 4.2%, 2.9 percentage points lower than in October 2021.
• STATIN noted that it compared the October 2023 Labour Force Survey findings with the corresponding 2021 results. This is because no Labour Force Survey was conducted in October 2022 due to the implementation of the 2022 Population & Housing Census.
• The unemployment rate for October 2023 was also 0.3 percentage points lower than April 2023 and 0.4 percentage points lower than July 2023. The unemployment rate for males was 3.1%, down from 5.4% in October 2021 and 5.4% for females, down from 9.0% in the comparable quarter of 2021.
• In October 2023, there were 724,600 people outside the labour force, a 5.5% decrease from 766,900 in October 2021. In April, there were 1,100 fewer people out of work, but in July 2023, there were 1,800 more. There were 291,700 males and 432,900 females out of the labour force. In the current quarter, compared to October 2021, there were 22,100 (7.0%) fewer males and 20,200 (4.5%) fewer females working outside the labour force.
• The largest increase in employment by occupation group was in ‘Service Workers and Shop and Market Sales Workers’ with 308,400 persons employed in October 2023. This represents an 11.2% increase when compared to October 2021. Within this occupation group, male employment increased by 13,500 (14.0%) and female employment by 17,500 (9.7%).
• In October 2023, there were 152,600 persons working in ‘Real Estate and Other Business Services’ and 133,200 persons in ‘Construction,’ an increase of 16.8% and 16.9%, respectively. These represent the largest increases by industry group.
• While lower unemployment bodes well for economic growth and job creation, it could also put upward pressure on wages and keep inflation elevated.

(Source: STATIN)

• On the heels of the most successful participation at FITUR (International Tourism Trade Fair) in Madrid, Minister of Tourism Hon Edmund Bartlett has announced the largest Spanish investment of over US$2Bn.The move will create approximately 19,000 new jobs in construction and tourism services.
• Minister Bartlett and his team concluded negotiations with three major Spanish hoteliers who are now in the advanced stages of development approval in Jamaica for groundbreaking events this year.
• The projects will see luxury rooms in Lucea, Hanover by Grand Palladium; housing units for tourism workers; a Convention Centre; entertainment facilities; and golf courses, among other amenities.
• Bahia Principe near Runaway, Bay St Ann, led by Spain's Pinero family, will have two new luxury hotels and cosmopolitan villas, as well as a residential neighbourhood, fishermen village, PGA golf course, private schools and entertainment, dozens of pools, and walking trails. This development is also expected to employ 12,500 workers. Luxury brand Secrets Resorts will construct several hundred rooms in Richmond St Ann, employing 2000 persons.
• Minister Bartlett met with all the current investors from Spain at the Grand Melia Palacio De Los DUQUES in Madrid, Spain, where these investment projects were presented and confirmed. As the Spanish investors continue to grow their businesses on the island, it will increase the economic benefits for the communities and at the national level.

(Source: JIS News)

• The Central Bank of Bahamas predicts economic growth to be in the low 2.0% range, still moderately above the estimate of the economy’s medium-term potential (below 2.0% per annum).
•  In 2023, the Bahamian economy was estimated to have grown in the 4.0% range, a levelling off from the significant post-pandemic recovery of around 14.0% in 2022. This period captured a robust boost in the cruise sector’s contribution, complete occupancy recovery in the stopover sector, and healthy appreciation in average pricing for stopover accommodations among hotels and vacation rental properties.
• In 2024, however, growth is expected to be within the low 2.0% range, still moderately above the estimate of the economy’s medium-term potential. Further, earlier this month, the World Bank revised its 2024 growth projection for The Bahamas down from 2.0% to 1.8%.
• According to Rolle, the Central Bank expects that growth in 2024 and beyond will settle further to more closely resemble The Bahamas’ longer-term potential. However, a period of acceleration could occur after hotel capacity is replenished in New Providence.
• Central Bank Governor John Rolle stated that although the economy has a positive outlook for 2024, enabling more employment creation and continued reduction in the fiscal deficit, downside risks persist from potential headwinds to tourism, particularly if international central banks prolong their fight against inflation. Additionally, travel demand and import inflation remain vulnerable to the harmful effects of conflicts in Europe and the Middle East.

(Source: Eyewitness News)

• A reimposition of U.S. sanctions on Venezuela's oil and gas sectors would hurt the OPEC country's ability to collect cash from its oil exports, crimp new energy investments, and raise the risks of domestic fuel scarcity, analysts and executives said.
• This week, Washington ordered a wind-down of all business transactions between U.S. entities and Venezuela's state miner Minerven. In addition, Washington noted it would unwind in April, easing of energy sanctions if President Nicolas Maduro's administration does not stick to an agreement signed last year to accept conditions for a fair presidential election.
• The U.S. is increasing its pressure since the South American country's top court upheld a ban blocking the leading opposition hopeful, Maria Corina Machado, from the election. The U.S., which first imposed oil sanctions on Venezuela in 2019, granted sanctions relief for the OPEC member country in October in recognition of the election deal.
• As a result of easing sanctions, Venezuela was expected to grow its total oil revenue to as much as $20Bn this year from some $12Bn in 2023, according to Caracas-based consultancy Ecoanalitica. However, larger exports of crude and petrochemicals to cash-paying customers in countries from the U.S. to India were behind its forecast.
• "Price discounts on Venezuela's crude had reduced a lot, and cashing sales proceeds became easier for state company PDVSA," said Francisco Monaldi, director of the Latin American Energy Program at Rice University's Baker Institute. "If the license is withdrawn in April, the proceeds will be reduced again and the scenarios of strong economic growth and a competitive election will fade," he added.
• Risks of a new bout of acute fuel scarcity also are poised to increase, experts said. Even if Washington continues authorizations for debt repayment deals to Chevron, Eni, Repsol, and Maurel & Prom to avoid a total break with Venezuela, that might not provide sustainable investment to expand output.

(Source: Reuters)

• The International Monetary Fund edged its forecast for global economic growth higher, upgrading the outlook for both the United States and China - the world's two largest economies - and cited faster-than-expected easing of inflation. The IMF's chief economist, Pierre-Olivier Gourinchas, said the global lender's updated World Economic Outlook showed that a "soft landing" was in sight. Still, overall growth and global trade remained lower than the historical average.
• The IMF said the improved outlook was supported by stronger private and public spending despite tight monetary conditions, increased labour force participation, mended supply chains, and cheaper energy and commodity prices. The IMF forecasts global growth of 3.1% in 2024, up two-tenths of a percentage point from its October forecast, and retained a 3.2% forecast for 2025. However, this is below the 2000-2019 historical average of 3.8%.
• Likewise, global trade growth forecasts of 3.3% in 2024 and 3.6% in 2025, well below the historical average of 4.9%, weighed down by 3,000 trade restrictions imposed in 2023. The IMF also stuck with its October forecast for headline inflation of 5.8% for 2024 but lowered the 2025 forecast to 4.4% from 4.6% in October. Excluding Argentina, which has seen inflation spike, global headline inflation would be lower, Gourinchas said.
• Advanced economies should see average inflation of 2.6%, down four-tenths of a percentage point from the October forecast, with inflation set to reach central bank targets of 2% in 2025. By contrast, inflation would average 8.1% in emerging markets and developing economies in 2024 before easing to 6% in 2025.
• China's GDP is expected to grow by 4.6% in 2024, an upward revision of four-tenths of a percentage point from October and 4.1% in 2025. Gourinchas said the boost reflected significant fiscal support from the authorities and a less-severe-than-expected slowdown stemming from the property sector.
• Gourinchas said the global outlook reflected more balanced upside and downside risks, with the risk of a wider conflict in the Middle East offset by the prospect that lower fuel prices could help inflation fall faster than expected.

(Source: Reuters)

• The euro zone's economy stagnated last year, underperforming the rest of the world as former powerhouse Germany struggled with an industrial malaise that has no end in sight, data showed on Tuesday.
• The 20 countries that share the euro barely avoided a recession in the final quarter of last year even as the global economy expanded and the euro zone's biggest trading partner, the United States, chalked up impressively brisk growth.
• The euro area's underperformance was mostly due to weakness in Germany, which has seen its business model relying on cheap energy from Russia and intense two-way trade with China upended by geopolitical events.
• Europe's largest economy shrank by 0.3% in the last three months of 2023 while the bloc as a whole saw steady output, helped by expansions in Spain and Italy, Eurostat' preliminary flash estimates showed. That marked the sixth consecutive quarter of no or little growth.
• Economists expect more of the same in the coming months before a timid recovery in the summer, which should lead to another year of meagre growth for the euro area.
• "Stronger household consumption as the effects of the shock to energy prices subside and inflation falls, supporting real income growth, is expected to drive the recovery," the International Monetary Fund said on Tuesday in its World Economic Outlook. Still, it downgraded its euro area economic growth forecast to 0.9% this year and 1.7% in 2025.

 (Source: Reuters)

• According to data on the Producer Price Index (PPI) released by the Statistical Institute of Jamaica (STATIN), the Mining and Quarrying Index rose by 0.3% in December, while the Manufacturing Index fell by 0.8%.
• The 'Bauxite Mining & Alumina Processing' category was the main driver of the rise in the Mining and Quarrying industry index increased by 0.3%. The index for 'Other Mining & Quarrying' also increased by 0.1%. The upward movements resulted from the depreciation of the Jamaican dollar vis-à-vis the United States dollar.
• In contrast, the manufacturing index fell for the third consecutive month. This was largely influenced by a decline in the index for the major group, ‘Refined Petroleum Products’ by 4.6%.
• With the December 2023 performance, point to point movement in the index for the Mining & Quarrying industry, a 4.4% increase spurred by a 4.3% increase in the index for the major group ‘Bauxite Mining & Alumina Processing’.
• The point-to-point increase in the index for the Manufacturing industry was more modest at 3.0%. Contributing to this increase were the major groups ‘Refined Petroleum Products’ (7.6%), ‘Food, Beverages & Tobacco’ (2.2%) and ‘Chemicals and Chemical Products’ (2.3%). However, these increases were moderated by a decline of 4.4% in the index for the major group ‘Fabricated Metal Products excl. Machinery & Equipment.
• The Producer Price Index (PPI) is a significant economic indicator that tracks the average fluctuation in selling prices that domestic producers of goods and services experience over time. However, geopolitical tensions in Europe and the Middle East pose risks that could disrupt the oil supply and supply chain, which could result in higher costs for producers.
• Furthermore, the drought in the Panama Canal and the tensions in the Black Sea region bring more challenges to producers through higher shipping costs as shippers resort to finding alternative routes to avoid these disruptions.

(Sources: STATIN & NCBCM Research)

• The Jamaica Stock Exchange (JSE) will become the first Caribbean marketplace to facilitate the issuance of green, blue, and other sustainable coloured bonds by the end of June 2024. Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, who made the disclosure, said this forms part of the Government’s framework to ensure that financing is available for sustainable initiatives.
• The colours include; blue, which represents marine and green, which represents climate, among others. This will be a very important step because investors who invest in these kinds of instruments want to know that the criteria for calling something green or blue are very firmly established
• Clarke indicated that the JSE “is being supported by the Inter-American Development Bank (IDB) to develop the infrastructure.”
• The Government is working on creating a financial facility as part of efforts to incentivise investments in Jamaica for sustainable projects and working towards partnerships with multilateral and bilateral to provide funding in a way that the Government can leverage its contribution several fold, noted Dr. Clarke. “Those funds will be available on concessional terms for investing in projects that have a green or blue lens, or features to them to incentivise investment in Jamaica that is sustainable”.
• The move aligns with an emerging theme in the global investment space, that of environmental, social, and governance (ESG), which encourages sustainable practices in key areas. It will serve to attract funding from investors who are particularly interested in projects with these mandates.

(Source: JIS)

• Rating agency Fitch Ratings forecasts a decline in economic growth across Latin America this year amid dampened demand, high borrowing rates, and considerable exposure to China and the U.S., which are also facing a slowdown. The agency put its average 2024 growth forecast for the region at 1.5%, down from 2.3% in 2023.
• Fitch Managing Director Shelly Shetty said that expected declines in larger economies like Mexico and Brazil have weighed down the region's overall forecast. Fears of a recession in Argentina, under the new government of Javier Milei, also had an impact.
• Shetty added that in the medium term, Latin America had several aspects working in its favor, including relative geopolitical calm, a wealth of commodities needed for the "green transition," and a shift in manufacturing from Asia to Mexico.
• However, the agency stressed that much of the region could struggle to capitalize on these advantages due to state interventionism, limited reform, and political disagreement, with the notable exception of Brazil.

(Source: Reuters)