• China is set to announce an easing of its COVID-19 quarantine protocols in the coming days and a reduction in mass testing, sources told Reuters, a marked shift in policy after anger over the world's toughest curbs fuelled widespread protests.
• Cases nationwide remain near record highs but the changes come as some cities have been lifting their lockdowns in recent days, and a top official said the ability of the virus to cause disease was weakening.
• Health authorities announcing the easing in their areas have not mentioned the protests - the biggest show of civil disobedience in China for years - which ranged from candle-lit vigils in Beijing to street clashes with police in Guangzhou.
• The frustration boiled over last week in demonstrations of public defiance unprecedented in mainland China since President Xi Jinping took power in 2012. The unrest comes as the economy is set to enter a new era of much slower growth than seen in decades.
• Expectations have grown around the world that China, while still trying to contain infections, could look to re-open its borders at some point next year once it achieves better vaccination rates among its hesitant elderly. Health experts warn of widespread illness and death if COVID is let loose before vaccination is ramped up.

(Source: Reuters)

• The Bank of Canada will hike its key interest rate by another 50 basis points to 4.25% on Dec. 7, according to a slim majority of economists in a Reuters poll that suggests the central bank will then hit pause on a nine-month tightening campaign.
• An economy that grew at a solid annualized 2.9% rate in the third quarter is increasingly at risk from a falling property market and one of the highest household debt-to-income ratios in the world, with the full effect of rate rises yet to be felt.
• Inflation, at 6.9% in October, is still running over three times the central bank's 2% target. That has left economists and markets at odds over whether the BoC, which has raised rates by 350 basis points since March, will opt for another half-point move and aim to wind up an aggressive campaign before an expected recession set in.
• Just over half, 16 of 30, of the economists polled over the last few days expected a half-point rise on Dec. 7 to 4.25%, matching a move in October and in line with current expectations for the U.S. Federal Reserve's December meeting.
• Fourteen said the BoC would dial down its pace to 25 basis points. Markets are pricing in an over 80% chance of 25bps, which would be a third straight reduction in rate hike size by policymakers from a peak of 100 in July.
• Although there was no clear consensus on when the overnight rate would peak, around 90% of respondents, or 26 of 29, predicted a terminal rate of 4.25% or higher, suggesting the BoC may be done in December and if not, soon afterwards.
• With inflation expected to stay above the BoC's target for the coming year, 10 of 13 economists who answered an additional question said the bigger risk was also that rates reach a higher peak, and later than they currently expect.

(Source: Reuters)

• For October 2022, output prices for producers in the Mining and Quarrying industry decreased by 9.4% while in the Manufacturing industry, prices declined by 1.0% as indicated by the Statistical Institute of Jamaica (STATIN). These declines represent the 4^th consecutive month of declines for both industries.
• The movement in the index for the Mining and Quarrying industry was mainly attributed to a 9.9% decline in the index for the major group ‘Bauxite Mining & Alumina Processing’. This is due primarily to the fact that the Jamalco refinery is only partially reopened. The index for the other major group ‘Other Mining & Quarrying’ recorded negligible movement.
• The main contributor to the decline in the index for the Manufacturing industry was the ‘Refined Petroleum Products’ group, which fell by 6.4%. This was due to the moderat energy prices. The impact of this fall on the industry was tempered by a 0.4% increase in the index for the major group ‘Food Beverages & Tobacco’.
• For the period October 2021 – October 2022, the Mining & Quarrying industry’s index fell by 19.8% while the point-to-point movement for the Manufacturing industry’s index increased by 14.6%. The three major groups contributing to the movement in the Manufacturing industry were ‘Refined Petroleum Products’ (24.7%), ‘Food, Beverages & Tobacco’ (13.5%), and ‘Chemical and Chemical Products’ (12.4 %).

(Source: STATIN)

• MFS Capital Partners Limited (MFS) has announced that it has signed a Memorandum of Understanding (MOU) with the shareholders of Micro Financing Solutions Limited to acquire 100% of its shares.
• Micro Financing Solutions Limited is a Kingston-based private company licensed by the Bank of Jamaica. The company began operations in 2014 as a microlender and licensed cambio, and since then, has expanded its operations into other areas including remittances, bill payment services and large credit. It has also gone on to take equity positions in several other entities. The company is a sub-agent of Lasco Moneygram and Western Union.
• This acquisition is a part of MFS’s strategy to target companies involved in money services, investment banking and real estate that show robust growth potential. This transaction would be the first major deal executed under the new management team of MFS. Completion of the deal is subject to regulatory approval.
• Given the approval, MFS will have a foothold in both micro-financing and cambio services which are two key areas that have the potential to boost company revenue.

(Source: JSE)

• Fitch Solutions maintained its forecast that Costa Rica will grow by 3.7% in 2022. As expected, headline inflation peaked at a historic high of 12.1% y-o-y in August, the highest since 2009, which has caused household consumption and economic activity growth to slow significantly in the third quarter.
• In 2023, growth is expected to ease to 2.9%, below the 2015-19 average of 3.4%, as net export growth will weaken from a 0.8pp contribution to GDP in 2022 to 0.4pp in 2023, as a slowdown in tourism growth will overshadow easing consumer goods imports.
• However, mounting headwinds, such as elevated inflationary pressures and interest rates, will yield weaker activity primarily in the US, the Netherlands and Central America (which together receive roughly 60.0% of Costa Rican goods exports) in 2023. This will dampen these markets’ demand for goods exports as well as tourism.
• Private consumption growth is expected to stagnate from a 1.9pp contribution to GDP in 2022 to 1.8pp in 2023. The primary driver of weak household consumption in the year ahead will be persistent inflationary pressures. Inflation is expected to come down from an average of 8.7% y-o-y in 2022 to 6.3% in 2023, which would be the second-highest level since 2009, eating into households’ purchasing power and weakening spending in real terms.
• Further, the Banco Central de Costa Rica (BCCR) is expected to raise its policy rate to 9.25% by end-2022 – with risks skewed to the upside – and will keep it elevated through H1 2023, which will increase the cost of borrowing, exerting downward pressure on investment for businesses. Investment will decline from 0.4pp contribution to headline growth in 2022 to 0.3pp in 2023, primarily due to tighter monetary policy.
• A less-severe slowdown in US growth poses an upside risk to Fitch’s growth forecast. If the US economy’s slowdown is less pronounced than Fitch’s forecast, particularly if inflationary pressures continue to ease or if the US Federal Reserve undertakes a less aggressive rate-hiking approach, Costa Rican export growth would see a less severe slowdown than currently forecast.

(Source: Fitch Solutions)

• The Bahamas has finally beaten pre-COVID tourism volumes as higher-spending stopover visitor arrivals for September exceeded 2019 numbers by almost 26%.
• Aided by the removal of COVID-related restrictions that impacted 2021’s performance, and continued pent-up travel demand in the US, the Central Bank said: “Tourism sector output remained buoyant, bolstered by healthy growth in the high value-added air segment and recovered sea traffic given the relaxed pandemic restrictions and pent-up demand for travel in the key source market.”
• With COVID restrictions now lifted, total visitor arrivals were said to be up 403% year-over-year largely due to the cruise industry’s resumption. That sector was completely shut down until June-July 2021 and, as a result, 2022 sea arrivals to The Bahamas for the nine months to end-September were some 1,033.2% up on last year. Air arrivals are 73.4% ahead. Meanwhile, visitor departures for the first nine months of 2022 were some 83.7% ahead of the prior year. Those to the US were up 69.3%, while departures to other destinations rose 301.6%.
• Meanwhile, acknowledging that The Bahamas remains caught in an inflationary spiral. “Average domestic consumer price inflation - as measured by the All Bahamas Retail Price Index - increased to 5.1% during the 12 months to September from 2% in the same period of 2021,” it said.

(Source: The Tribune)

• Citigroup on Wednesday, November 30, forecasted global growth to slow to below 2% next year, echoing similar projections by major financial institutions such as Goldman Sachs, Barclays, and J.P. Morgan.
• Strategists at the brokerage cited continued challenges from the COVID-19 pandemic and the Russia-Ukraine war — which skyrocketed inflation to decades-high levels and triggered aggressive policy tightening — as reasons behind the outlook.
• "We see global performance as likely being plagued by 'rolling' country-level recessions through the year ahead," said Citi strategists, led by Nathan Sheets.
• While the Wall Street investment bank expects the US economy to grow by 1.9% this year, it is seen more than halving to 0.7% in 2023.
• It expects, year-on-year, US inflation at 4.8% next year, with the U.S. Federal Reserve's terminal rate seen between 5.25% and 5.5%.

(Source: Reuters)

• The OPEC+ decision to hold its Dec. 4 meeting virtually signals little likelihood of a policy change, sources told Reuters on Wednesday, Nov. 30, as the group assesses the impact of the looming Russian oil-price cap on the market.
• A virtual meeting puts the focus on the pending European Union deal over the price cap on Russian oil, as well as a Dec. 5 deadline imposed by the bloc for a full embargo on purchases of Moscow's seaborne crude.
• "OPEC+ would rather sit on the bench at this time and assess the outcome of what happens on Monday," one source with direct knowledge of the matter told Reuters on Wednesday.
• The Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, also meet as China's COVID-19 lockdowns weigh on demand and prices. Still, oil on Wednesday gained support from hopes of a Chinese demand recovery.
• OPEC+ had been expected to convene in Vienna for only the second time since the pandemic.

(Source: Reuters)

• Prime Minister, the Most Hon. Andrew Holness, and Tourism Minister, Hon. Edmund Bartlett, on Friday (November 25), broke ground for a multimillion US dollar boutique resort development in Lilliput, St. James.
• The adults-only, all-inclusive hotel will provide approximately 451 additional rooms, including over-the-water bungalow accommodations aimed at attracting thousands more new tourists to Jamaica.
• Additionally, the Spanish resort’s construction will see the employment of over 1,000 local skilled labourers, locally, and create more than 600 new permanent jobs in the tourism sector.
• The project is the first of a series of programmed developments for owners, the RCD Hotels and AIC Hotel Group that will also be partnering with the Government to provide housing solutions for their workers. “If we are truly interested in building an excellent [tourism] product, then we must not only build rooms for visitors, but we also have to build rooms for the workers, and the Government has a key role to play in ensuring that we have houses; homes for the people who work in the industry,” the Prime Minister outlined.

(Source: JIS)

• The United States (US) Government will increase its investment in Jamaica with some US$34Mn committed to violence reduction, combatting human trafficking, cybersecurity, energy security, and initiatives to boost the economy.
• Details were provided by Secretary of State for Political Affairs, Ambassador Victoria Nuland, at the US-Jamaica Strategic Dialogue held recently at the Ministry of Foreign Affairs and Foreign Trade, downtown Kingston.
• The US has also dedicated US$3.5Mn to strengthen Jamaica’s cybersecurity capacity and position the country to be a leader in the region, while through the United States Agency for International Development (USAID), US$20mMn will be invested to boost the economy and drive local economic growth to ensure young Jamaicans have better opportunities.
• This increased investment to reduce crime and violence and other social factors could positively impact Jamaica’s Long-term Political Risk Index score which currently stands at 63.9 out of 100 below the Caribbean average of 64.5.

(Source: JIS)