• The Government is continuing the implementation of tax reforms, deemed critical to fostering sustainable inclusive economic growth in Jamaica. Among the initiatives Prime Minister, Dr. the Most Hon. Andrew Holness, indicated is the consolidation of payroll taxes into a single deduction system, with a target implementation date of January 2026.
• “By [then] we should have a single social contribution payroll system established. But I’ve given… an earlier deadline to make sure that the system is actually up. So, we are now well on our way to having it done,” Dr. Holness stated. He was addressing the Jamaica Stock Exchange (JSE) Investments and Capital Markets Conference at The Jamaica Pegasus Hotel in New Kingston on Tuesday, January 21, 2025.
• PM Holness also mentioned plans to revamp the urban renewal tax credit framework, to attract increased investments in underserved communities. He noted the Administration’s focus on, establishing new urban centres in each parish to transform them into economic hubs.
• Meanwhile, the Administration is exploring a further increase in the threshold at which small businesses must register for General Consumption Tax (GCT), following a previous increase from $3Mn to $10Mn in 2019. Additionally, there are also plans to incentivise Jamaican companies, currently domiciled overseas, to return their operations home.
• PM Holness also advised that the Government is expanding online tax payment systems and administration services to enhance efficiency.
• Overall, he emphasised the importance of reforming Jamaica’s tax system, including Customs, as a cornerstone of economic recovery and development, citing this as “a critical focus of our Government”.

(Source: JIS)

• Data from the Statistical Institute of Jamaica (STATIN) Labour Force Survey (LFS) revealed the unemployment rate stood at 3.5% in October 2024, down from 3.6% in July 2024. This marks one of the lowest unemployment rates recorded, even as disparities between genders and age groups remain evident.
• The total number of unemployed individuals amounted to 51,300, down from 52,600 in July, with females making up 60.0% of unemployed individuals. 21,600 of the unemployed persons were youth (aged 15 to 24 years), with females accounting for 12,000 or 55.6%.
• Overall, female and youth unemployment was higher. Female unemployment stood at 4.5% compared to males who had a 2.6% rate of unemployment. However, Youth unemployment was higher at 11.0%, with young adult females having a higher unemployment rate of 13.7% compared to 8.9% for young adult males.
• Of note, the labour force rose to 1,468,300 persons, after shrinking in July 2024 to 1,461,600. 789,100 (53.7%) were males, while 679,200 (46.3%) were female. The increase in the labour force reflects a lower participation rate of 68.1%, up slightly from 67.8% in July.
• Regarding employee distribution across occupation groups, the ‘Services and Sales Workers’ segment employed the highest number of individuals at 343,400 or 24.2% of the labour force. The second largest was ‘Skilled Agricultural, Forestry and Fishery Workers’ with 201,400 workers, followed by ‘Elementary Occupations’, with 176,200 workers.
• The ‘Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles’ remains the largest employer, engaging 265,600 or 18.7% of the individuals. The second largest industry group was ‘Agriculture, Forestry, and Fishing’, with 201,400 individuals.
• The latest unemployment figure continues to beat expectations for unemployment levels to inch up in 2024, given Jamaica’s economic contraction of 3.5% for Q3 2024 and the expectations for low growth in Q4 2024.
• The unemployment data for July and October reflects the new labour force series, introduced in January 2024 when unemployment amounted to 5.4%. It represents a break in the series and as such is not comparable with previous survey data. The new series incorporates the latest guidelines from the International Labour Organization (ILO), which resulted in, inter alia, a significant change in the definition of employment and unemployment.

(Sources: STATIN, RJR News & NCBCM Research)

• Mexico's annual inflation rate slowed to its lowest level in almost four years in the first half of January, official data showed on Thursday, a price level likely to encourage the central bank to keep cutting borrowing costs.
• 12-month headline inflation came in at 3.69% in early January, statistics agency INEGI announced. This was its lowest since February 2021 and was within the central bank's 3% target, plus or minus one percentage point. Annual inflation was below both the previous month's 4.44% and the 3.78% forecast by economists polled by Reuters.
• Slowing consumer price growth was driven by lower non-processed food costs, which helped offset a slightly higher-than-expected reading in the core index, which some consider more reliable as it excludes volatile energy and food prices.
• In December, the Mexican central bank - known as Banxico - delivered its fifth interest-rate cut that year, taking its key lending rate to 10.00% with a 25-basis-point reduction while citing progress on inflation.
• Mexico is bracing for additional price pressures as U.S. President Donald Trump threatens tariffs on its exports in addition to mass deportations.
• Core inflation rose 0.28% in early January, while the annualized core rate came in at 3.72%, exceeding market expectations of 3.68% and the previous month's 3.62%.
• Banxico is scheduled to announce its next rate decision on Feb. 6.

(Source: Reuters)

• The Bahamas faces significant climate risks, with rising sea levels and hurricanes potentially reducing economic output by 11% by the year 2100 but investing in climate resilience could boost economic output by 9% over the next three-quarters of a century, according to the International Monetary Fund (IMF).
• The report also noted that modernising electricity grids and increasing the share of solar energy and liquefied natural gas (LNG) in electricity production could yield major macroeconomic benefits for The Bahamas.
• These transformations, over the medium term, could reduce fossil fuel imports, decrease the country’s vulnerability to volatile global fuel prices, significantly lower Carbon Dioxide (CO₂) emissions, and substantially boost national output, eventually increasing long-term growth potential from 1.5% to 2.0%.
• The government aims to harness the abundant solar energy available year-round in The Bahamas, targeting a 30% share of solar energy by 2030.
• “Unfortunately, even with these investments, the threat of climate change is here to stay. IMF analysis suggests that rising sea levels could place up to 41% of the land in The Bahamas and 22% of its population below sea level by the end of this century”.
• The report went on to state that, “the country is positioned within the Atlantic hurricane belt, leaving it at high risk of hurricane damage. Left unaddressed, more severe natural disasters and slow-moving impacts from climate change could reduce The Bahamas’ national output by up to 11% by 2100, with larger losses in islands whose economies rely most on hospitality and real estate.”

(Source: Eyewitness News)

• U.S. President Donald Trump demanded OPEC lower oil prices and the world drop interest rates in a speech to global business and political leaders and warned them they will face tariffs if they make their products anywhere but the U.S. "I'll demand that interest rates drop immediately. And likewise, they should be dropping all over the world," Trump said via video to the World Economic Forum in Davos, Switzerland, on Thursday. "I'm also going to ask Saudi Arabia and OPEC to bring down the cost of oil."
• The remarks, Trump's first to global leaders in his four-day-old presidency, bolster the message that his second term will eschew free market norms inside the U.S. and out. Despite robust comments on the tariffs he wants to put in place, he did not provide specifics at a time when markets are on edge over his plans.
• Oil prices turned negative as Trump spoke, while the euro dipped, and the U.S. dollar swung between gains and losses against a basket of foreign currencies. The S&P 500 benchmark of U.S. stocks rose to a near-all-time high. Trump spoke to about 3,000 Davos attendees, who cheered as Trump's face appeared on the big screen. The president, a businessman whose first elected office was the White House, listed the rapid-fire changes he had made since his swearing-in on Monday that have upended U.S. government policies on diversity, climate change and immigration.
• In a subsequent conversation with conference attendees including Bank of America CEO Brian Moynihan and Blackstone Group CEO Stephen Schwarzman, the U.S. president's remarks veered between compliments and criticism.
• Trump's address was an unusual moment, affording a handful of business executives an opportunity to publicly question the U.S. president on issues that affect their businesses, or in some cases their specific investments, projects and interests.

(Source: Reuters)

• The Bank of Japan (BOJ) is expected to raise interest rates on Friday to levels unseen since the 2008 global financial crisis, as broad worldwide stocks rally calms policymakers' fears U.S. President Donald Trump's tariff threats could upend markets.
• With traders almost fully pricing in the chance of a rate hike, attention now shifts to any clues BOJ Governor Kazuo Ueda's post-meeting briefing could offer on the pace and timing of subsequent increases in borrowing costs. At the two-day meeting concluding on Friday, the BOJ is widely expected to raise its short-term policy rate from 0.25% to 0.5% - a level Japan has not seen in 17 years.
• The move would underscore the central bank's resolve to steadily push up interest rates near 1% -  a level analysts see as neither cooling nor overheating Japan's economy. "Market hasn't shown much negative reaction to Trump's comments, so the BOJ will probably proceed with a rate hike," said Naomi Muguruma, chief bond strategist at Mitsubishi UFJ Morgan Stanley Securities.
• A hike by the BOJ would be the first since July last year when the move, coupled with weak U.S. jobs data, shocked traders and triggered a rout in global markets in early August. Keen to avoid a recurrence, the BOJ prepared markets with strong signals from Ueda and his deputy last week that a rate hike was on the cards. The remarks caused the yen to rebound as markets priced in a roughly 90% chance of a rate increase.
• In a quarterly outlook report due after the meeting, the board is expected to raise its price forecasts on growing prospects that broadening wage gains will keep Japan on track to sustainably hit the bank's 2% inflation target. Many analysts already expect the central bank to hike rates again later this year, barring a Trump-induced market shock that hits global growth and Japan's fragile economic recovery.
• Since taking the helm in April 2023, Ueda dismantled his predecessor's radical stimulus programme in March last year and pushed up short-term interest rates to 0.25% in July. BOJ policymakers have repeatedly said the bank will keep raising rate, if Japan makes progress in achieving a cycle in which rising inflation boosts wages and lifts consumption - thereby allowing firms to continue passing on higher costs.

(Source: Reuters)

• An exchange programme is among areas of cooperation being put forward to improve human resources in the public healthcare sector, between the Governments of Jamaica and the Republic of the Philippines.
• Discussions are in progress as the Ministry of Health and Wellness hosts the visit of the Secretary of Health for the Republic of the Philippines, Dr. Teodoro J. Herbosa, from January 20 to 23.
• It is expected that the countries will sign a Memorandum of Understanding (MOU) for human resource training and other technical support for cooperation and exchange between the countries.
• Speaking with journalists, Chief Medical Officer (CMO) in the Ministry of Health and Wellness, Dr. Jacquiline Bisasor-McKenzie, said the bilateral agreement should prove to be mutually beneficial. A delegation from the Ministry recently visited the Philippines to conduct a review of the country’s public health framework.
• “I think the exchanges that we are looking at [will focus on] physicians and nurses. When we were in the Philippines, we visited a lot of their specialist hospitals and what we found was that they certainly have the numbers to give exposure to a lot of procedures. ”Dr. Bisasor-McKenzie said, noting that the Philippines boasts a strong nurse training programme.
• In terms of what Jamaica can contribute under the exchange programme, Dr. Bisasor-McKenzie pointed to the country’s very high rate of immunisation, its community mental health programme, and its well- known ‘Jamaica Moves’ public education campaign that promotes a healthy lifestyle to reduce non-communicable diseases (NCDs).

(Source: JIS)

• Amid the growing concern about foreign exchange constraints in the country, the Trinidad and Tobago Manufacturers' Association (TTMA) is hoping the ongoing trade mission to Dominica will help the situation.
• TTMA Chief Executive Officer Mahindra Ramdeen said he hopes the four-day mission would benefit emerging businesses and the association views Dominica as a distinctive opportunity for both T&T and the Dominican economy.
• T&T's delegation to Dominica – spearheaded by Trade Minister Paula Gopee-Scoon – consists of 29 participants, including 19 companies across the food and beverage, construction, printing and packing, chemical and household, construction and services sectors.
• During the four-day mission, Minister Gopee-Scoon will meet with the Ministry of Foreign Affairs, International Business, Trade and Energy, the Ministry of Agriculture, Fisheries, Blue and Green Economy, the Dominica Association of Industry and Commerce, and the Dominica Manufacturers Association.
• The initiative is part of Trinidad and Tobago’s Export Booster Initiative or EBI, a strategic effort designed to increase the value of the country’s non-energy exports over the next three years.

(Source: Trinidad and Tobago Guardian)

• Bahamas’ external reserves decline slowed significantly in November, dropping by $0.4Mn compared to a sharp $30.6Mn reduction in the same period in 2023, according to the Central Bank, reflecting a notable year-over-year reversal in foreign currency transactions.
• In its monthly Economic and Financial Developments report for November 2024, the regulator noted that the decline in external reserves moderated considerably, primarily due to net foreign currency inflows from the private sector, which helped offset net public sector outflows.
• Regarding the broader economy, the Central Bank noted that in November, the domestic economy sustained its growth momentum, although at a more tempered pace compared to the previous year.
• The tourism sector showed continued expansion, though more slowly, with strong growth in the cruise segment offset by capacity constraints in the high-value-added stopover component.
• On price developments, average consumer price inflation – as measured by the Retail Price Index (RPI) for The Bahamas – slowed during the 12 months to September 2024, relative to the same period in 2023, reflecting a moderation in price pressures for imported fuel and other goods and services.

(Source: Eyewitness News)

• S. President Donald Trump vowed to hit the European Union with tariffs and said his administration was discussing a 10% punitive duty on Chinese imports because fentanyl is being sent from China to the U.S. via Mexico and Canada.
• Trump voiced his latest tariff threats in remarks to reporters at the White House a day after taking office without immediately imposing tariffs as he had promised during his campaign. Financial markets and trade groups exhaled briefly on Tuesday, but his latest comments underscored Trump's longstanding desire for broader duties and a new Feb. 1 deadline for 25% tariffs against Canada and Mexico, as well as duties on China and the EU.
• Trump said the EU and other countries also had troubling trade surpluses with the United States. "The European Union is very, very bad to us," he said, repeating comments made Monday. "So, they're going to be in for tariffs. It's the only way ... you're going to get fairness."
• Trump said on Monday that he was considering imposing duties on Canada and Mexico unless they clamped down on the trafficking of illegal migrants and fentanyl, including precursor chemicals from China, across their U.S. borders.
• China said it was willing to maintain communication with the U.S. to "properly handle differences and expand mutually beneficial cooperation". It sought to promote stable and sustainable ties with the U.S., the foreign ministry said.
• "We always believe that there is no winner in a trade war or tariff war. China will always firmly safeguard its national interests," ministry spokesperson Mao Ning told reporters at a regular press briefing on Wednesday. White House trade adviser Peter Navarro told CNBC that Trump's Canada and Mexico tariff threat was to pressure the two countries to stop illegal migrants and illicit drugs from entering the U.S.

Source: (Reuters)