• U.S. consumers' inflation expectations rose for the second consecutive month in November, with households anticipating a 4.5% inflation rate over the next year, up from 4.2% in October and 3.2% in September.
• Over a five-year horizon, consumers expect inflation to average 3.2%, increasing from 3.0% in October to 2.8% in September. This long-term outlook is the highest since 2011 and hasn't been surpassed since 2008 during the financial crisis.
• Despite evidence of a slowdown in actual inflation rates since the summer of 2022, consumers express concerns that the deceleration might reverse in the coming months and years.
• The Federal Reserve is faced with the challenge of managing inflation expectations, as an unanchoring of these expectations could impact consumer behaviour and contribute to further price increases. The divergence in survey results, with the University of Michigan showing rising expectations while other measures indicate moderation, adds complexity to the Fed's decision-making process.

 (Source: Reuters)

BOJ Maintains Policy Rate at 7.0% To Support Inflation Reduction

• The Bank of Jamaica’s (BOJ) Monetary Policy Committee (MPC), at its meetings on 17 and 20 November 2023, unanimously agreed to maintain: the policy interest rate (the rate offered to deposit-taking institutions (DTIs) on overnight placements with Bank of Jamaica) at 7.0%; tight Jamaican dollar liquidity conditions; and relative stability in the foreign exchange market.
• The decision to maintain the monetary policy stance is based on the MPC’s view that, while inflation at October 2023 fell within the Bank’s target range, it is projected to rise above the target range between the December 2023 and March 2025 quarters. The MPC however noted the downside risks to this outlook, including fiscal measures to counteract the inflationary pressures from recent regulated price increases, the relative stability in core inflation and the prospect of the United States (US) Federal Reserve Board (Fed) maintaining its policy rate in the near future.
• Headline inflation fell within the target range for the second consecutive month. The annual inflation rate at October 2023 of 5.1% was below the 5.9% at September 2023, and also much lower than the peak rate of 11.8% recorded at April 2022. Core inflation (which excludes food and fuel prices from the Consumer Price Index (CPI)) was 5.7% at October 2023, generally in line with the average for the past two months and, lower than the 8.4% recorded at April 2022.
• The projected acceleration in inflation primarily reflects the impact of the announced increases in selected 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 grains prices are, however, projected to continue to fall in a context of buoyant supplies, while shipping prices are forecasted to remain low and stable, given a projected slowdown in global growth.
• The risks to the inflation outlook are, however, skewed to the downside (inflation lower than projected). The main downside risks include the possibility of fiscal measures being implemented to cushion the impact of the increase in PPV fares, which was signalled by the Government. Oil prices could also trend below the forecast. Upside risks to this outlook include higher-than-projected future wage adjustments in the context of the tight domestic labour market, second-round effects from the PPV fare increases, sharp increases in domestic agricultural price inflation over the near term, and worsening supply chain conditions.
• Future monetary policy decisions will depend on incoming data related to the relative strength of the risks to inflation noted above. The Committee decided to maintain heightened surveillance of the risks, and is committed to the Bank using the complete set of tools at its disposal to achieve the policy objective. The Committee also noted its preparedness to take the necessary actions, including further tightening of monetary policy, if the emerging upside risks to inflation materialise. As such, the Bank will continue to closely monitor the global and domestic economic environments for these potential risks to Jamaica’s inflation rate. The date of the next policy decision announcement is 20 December 2023.

(Source: BOJ)

• The Planning Institute of Jamaica (PIOJ) reported that the economy grew by an estimated 1.9% during the July to September 2023 quarter, compared with the corresponding period last year. Speaking during the PIOJ’s quarterly briefing on Tuesday (November 21), Director General, Dr. Wayne Henry said the out-turn for the review quarter largely reflected higher levels of employment, increased capacity utilisation in the mining and quarrying industry, and continued growth momentum in the tourism sector.
• Real value added for the mining and quarrying industry increased by an estimated 102%, due to higher alumina production that outweighed a contraction in crude bauxite output. “Alumina production increased by 136.6% due to an expansion in the alumina capacity utilisation rate to 42.4%, up 24.5 percentage points. This was driven by increased capacity utilisation at the Windalco and Jamalco refineries as operations gradually returned to normalcy following technical issues that constrained production at Windalco, as well as Jamalco’s ramping up of capacity since its reopening at limited capacity in the corresponding period of 2022,” Dr. Henry said.
• Henry informed that real value added for the hotels and restaurants industry grew by 8.0% during the quarter. The industry continues to benefit from increased foreign national arrivals, considering the continued economic growth in main source markets.
• Growth in the manufacturing industry was estimated to be 3.2%, stemming from increased output in both the Food, Beverages & Tobacco and Other Manufacturing industries. The Director General added that the improved performance of the Other Manufacturing sub-industry mainly reflected higher production in petroleum products, all of which increased.
• Meanwhile, the agriculture, forestry and fishing sector contracted by an estimated 9.0%, reflecting the adverse impact of drought conditions. The industry’s performance was reflected in declines recorded for Other Agricultural Crops, which contracted by 11.8%. Lower production was recorded for eight of the nine crop groups.
• Turning to construction, real value added was projected to be flat, reflecting an estimated contraction in building construction, which was counterbalanced by growth in the ‘Other Construction’ component of the industry.
• Economic growth is anticipated for the remainder of this calendar and fiscal year. For October to December 2023, it is projected that the economy will grow within the range of 1.0% to 2.0%, resulting in calendar year growth (January to December 2023) within the range of 2.0% to 3.0%. For Fiscal Year 2023/24, the projection is for growth within the range of 1.0% to 2.0%.

(Sources: JIS & PIOJ

• Businesses in both Guyana and the European Union (EU) member states are expected to foster better business and trade relations, as the European Chamber of Commerce was officially established locally.
• The Chamber of Commerce which, this month, officially established a presence in Guyana, was on Monday evening introduced to the public at a reception at the EU Ambassador’s Residence.
• In a brief address at the launch of the chamber, Minister of Public Works, Juan Edghill said that he hopes that networking through the newly established chambers will develop synergies, and possible partnerships and create investment opportunities.
• He said: “This will bring a new wave and a new breath of fresh air, both in terms of time, quality, and style because in every part of the world you have different experiences. We are not closed to any group; Guyana is open for business, and whoever wants to come to Guyana on fair terms and conditions to satisfy what we are seeking to do.”
• Meanwhile, Gregory Dean, Chairman of the Chamber of Commerce, expressed that “we’ve been set up to create opportunities, to network, share knowledge and also best practices, advocate on behalf of our members in the EU, and also in Guyana, provide advice and support to EU companies entering the Guyanese market, and also for me, critically, Guyanese companies wanting to enter the EU market,” he said.
• Dean related that they have seen a lot of interest in Guyanese companies wanting to enter the EU market, but have had difficulties among other things. As such, he indicated that the chamber will play a critical role in terms of getting companies to establish their businesses in the EU. Dean said too that they are open for business and ready to foster better relations between the EU and Guyana.

(Source: Guyana Chronicle)

• The ongoing protests against the mining contract between Panama and Minera Panama have hit the country’s tourism industry hard, with potential visitors fearing they will be trapped in the closures and even exposed to the danger of attacks.
• Foreign tourists continue to cancel reservations some cruise routes have changed their itineraries, and conventions and events canceled. All of this has translated into the loss of income and customers.
• Notably, the flow of travellers to and from Panama fell by 15.48% in October, and the road blockades to the interior of the country have caused losses of $60Mn for domestic tourism operators.
• Ernesto Orillac, a member of Camtur (the National “Chamber of Tourism), adds that the arrival of more than 56 cruise operations and the Home Port in Panamanian ports is at risk.
• “The street closures in Panama City, and other inland areas negatively impact tourists' perception of the country's security, and what we see is that these closures and the vandalism that currently exists have nothing to do with the legitimate peaceful protest that occurred against the mining contract,” said Orillac, pointing out that the avenues must be opened and wait for the decision of the Supreme Court.
• Orillac mentioned that according to the Panama Tourism Promotion Fund (Promtur), between 68,000 and 70,000 international visitors who had planned to come between November and December of this year will not enter the country. This will mean about $400Mn will no longer be generated throughout the tourism production chain.
• In addition to this, at least $60Mn have been lost due to the cancellations and suspension of trips to the interior during the days of national holidays. It is estimated that an additional $30Mn will also be lost this coming weekend which commemorates Panama's independence from Spain.

(Source: Newsroom Panama)

• The unexpected delay in the OPEC+ meeting, originally set for November 26 but postponed to November 30, led to a nearly 1% decline in oil prices. The meeting aimed to discuss potential changes to existing production cuts.
• Brent futures dropped 4% to $78.41 a barrel, with U.S. West Texas Intermediate crude falling over 5% to $73.79. Prices later rebounded after it was revealed that the delay was due to disagreements among smaller African producers within OPEC+, and some attributed the initial drop to low liquidity ahead of the U.S. Thanksgiving holiday.
• The delay raised concerns about potential increased oil production in the coming months, especially if OPEC+ does not extend or increase current output cuts. U.S. crude oil inventories rose by 8.7 million barrels, contributing to the downward pressure on prices.
• The U.S. dollar rebounded from a 2.5-month low, making dollar-denominated oil more expensive for buyers in other currencies. Despite the need for OPEC+ to extend and potentially increase cuts to support prices, a bearish outlook for the oil market was presented earlier in the week, and there are predictions of a slight supply surplus in the global oil market by 2024.

(Source: Reuters)

• Canada's annual inflation rate decreased more than anticipated to 3.1% in October, down New claims for unemployment benefits in the U.S. decreased more than expected, but this does not alter the perception of a gradually slowing labour market due to higher interest rates impacting economic demand.
• While weekly jobless claims dropped, the unemployment rolls, though declining for the first time since mid-September, remained near yearly highs, indicating persistent challenges in handling seasonal fluctuations in the data.
• Economists believe the Federal Reserve is unlikely to raise interest rates further, considering the slowdown in labour demand and easing inflation. However, the job market remains robust enough to preclude immediate considerations for rate cuts.
• Concerns about rising inflation expectations, reflected in a University of Michigan survey, could influence policymakers, reminding them that the recent surge in inflation may take time to fully reverse, even as the labour market moderates.

(Source: Reuters)

• The Jamaica Bankers Association (JBA) stated that its member banks are working towards improving access to Automated Banking Machines across the island, despite the continued threats of theft, vandalism and attacks on cash couriers. In a release last week, the JBA noted that there are roughly 884 ABMs islandwide which are owned and operated by its members.
• It went on to state that it has taken firm action to mitigate the threats faced and has forged closer collaborations with service providers, law enforcement, and other authorities to guide operational decisions and implement protocols.
• In addition to improving access, the JBA mentioned that its members are seeking to restore the availability of cash to improved levels. This will be accomplished with new security measures and the re-deployment of some decommissioned ABMs from remote areas to more secure sites (such as police stations).
• Additionally, the JBA highlighted that members also have plans to increase ABM deployments in key districts to fill existing demand gaps and employ the use of revised operating plans to improve cash access and fault resolutions.

(Source: RJR News)

• With an estimated value of US$4.3 trillion globally, the health and wellness industry offers significant economic opportunities to Jamaica, says Tourism Minister, Hon. Edmund Bartlett. Speaking to JIS News after the Fifth staging of the Jamaica Health and Wellness Tourism Conference on November 16, Mr Bartlett said that to make an inroad into the lucrative market, Jamaica intends to promote existing medical tourism products and services as well as to develop and market spa facilities throughout the island.
• He emphasised that developing the health and wellness subsector is among the Ministry’s growth strategy goals, “offering visitors an unmatched value proposition based on innovation, diversification and differentiation of our tourism product” Mr. Bartlett said, adding that the Milk River Bath in Clarendon and Bath, St. Thomas, spa facilities will undergo restoration to meet international standards and demands.
• Jamaica’s unique combination of natural beauty, cultural heritage and proximity to the United States gives it a competitive advantage over many of its global competitors. As the demand for holistic experiences and well-being continues to rise, Jamaica can establish itself as a leading choice for travellers seeking restorative retreats.
• “As Jamaica continues to invest in its health and wellness tourism sector, significant value-added earnings can be expected. The influx of international visitors seeking wellness experiences will lead to increased revenue from accommodation, dining, leisure activities, and transportation services,” the Minister argued.
• Partnerships have been established with wellness industry leaders, global travel agencies, and influential wellness bloggers to enhance Jamaica’s visibility as a premier destination, adding that the Government is actively supporting the construction of wellness resorts and investing in sustainable infrastructure, ensuring that Jamaica remains competitive in the global health and wellness tourism market.

 (Source: JIS)

• The Central Statistical Office (CSO) reported that Trinidad and Tobago’s (T&T’s) inflation rate fell to 1.3% last month compared to October 2022. Consumer prices rose by 0.3% in the month between September 2023 and October 2023.
• The Consumer Price Index (CPI) rose by 5.1% between October 2022 and October 2023, down from an annual increase of 6.4% in the 12 months to September 2023. The annual growth in the CPI has been over 5.0% since October 2021.
• Notably, the All-Items Index recorded for October 2023 was 124.1 points, which was 1.3% higher than the 122.5 that the index recorded one year earlier.
• Prices of food and non-alcoholic beverages increased by 1.86%, moving from 144.5 in October 2022 to 147.2 in October 2023. Food and non-alcoholic beverages constitute 17.3% of the All-Items Index, which is only surpassed by costs associated with home owning, which account for 27.5% of the All-Items Index.
• For the year between October 2022 and October 2023, alcoholic beverages and tobacco increased by 7.4%. However, clothing and footwear declined by 4.8%, housing, water, electricity, gas and other fuels fell by 1.3%, and home ownership was down by 1.8%.
• According to the CSO, the Index for Food and Non-Alcoholic Beverages decreased from 148.2 in September 2023 to 147.2 in October 2023, reflecting a decrease of 0.7%. Contributing significantly to this decrease was the general downward movement in the prices of Irish potatoes, fresh whole chicken, onions, eddoes, pumpkin, plantains, chive, dasheen, sweet potatoes, and ochroes.
• Nonetheless, the full impact of these price decreases was offset by the general increases in the prices of table margarine, carrots, melon, green sweet peppers, parboiled rice, fresh carite and grapes, melongene, bodi and brown sugar.

(Source: Trinidad and Tobago Guardian)