• Fitch Solutions forecasts that the Bank of Jamaica (BOJ) will raise its benchmark interest rate by an additional 100 basis points (bps) by end-2022, to 5.50%, in response to high inflation. The BOJ has raised the rate by 400bps since October 2021, to 4.50% as of April 2022, in response to mounting inflationary pressures and the beginning of the US Federal Reserve’s (Fed) rate-hiking cycle. 
• After rising to a multi-year high of 11.3% y-o-y in March 2022, Fitch expects that inflation will remain well above the BOJ’s target range of 4.0% to 6.0% in both 2022 and 2023, as the Russian invasion of Ukraine will keep commodity prices elevated into next year. This will in turn prompt the BOJ to make additional hikes in the near term, though it will begin to lower the benchmark rate in 2023 as price growth slows. 
• Fitch expects that Jamaica’s inflation rate will average 11.4% in 2022 and 7.3% in 2023, from 5.8% in 2021, as the Russia-Ukraine war exerts upward pressure on commodity prices.  
• In late 2021, Jamaica was already in the midst of accelerating price growth due to a short-term agricultural shock stemming from tropical storms Grace and Idain August 2021 and high oil prices. Inflation has continued to gain steam in early 2022, rising to 11.3% in March, and will likely climb further in the months ahead as reliance on imports leaves the market exposed to the impacts of higher commodity prices and shipping costs.

(Source: Fitch Solutions)

• A sum of more than US$200Mn is to be spent over the period 2022 to 2025, for capital expenditure programmes at the nation’s international airports and aerodromes, with a figure of US$70Mn slated to be spent this financial year. 
• Minister of Transport and Mining Hon. Audley Shaw made the announcement during his contribution to the 2022/23 Sectoral Debate in the House of Representatives on April 27. 
• The upgrades will include runway expansions which will increase runaways by approximately 400 metres to 3,060 metres, and provide runway end safety areas as mandated by the International Civil Aviation Organization (ICAO). Additionally, it will enable airports such as the Sangster International Airport to accommodate long-haul flights from destinations it cannot now serve, such as East Asia. 
• These planned upgrades provide a potential tailwind for increased overnight tourist arrivals which will ultimately support the recovery of the tourism industry as airports will now have the ability to secure travel routes from previously untapped destinations.

(Sources: JIS News & NCBCM)

• Despite a number of uncertainties that continue to threaten the economic prospects for Barbados this year, the island recorded economic growth of 11.8% for the first three months of 2022 and is on track to end the year with double digit growth, according to the latest Central Bank report. 
• The 11.8% growth in economic activity during the first three months was led by the tourism sector as pent-up travel demands translated into the highest level of long-stay arrivals since the onset of the pandemic. 
• Travel from the United Kingdom dominated the upswing in tourism demand, accounting for more than half of the arrivals, the equivalent of 75% of 2019 levels. In spite of the strong performance, long-stay arrivals were equivalent to just 55% of 2019’s record level as demand from the United States, Canadian and Caribbean markets recovered more slowly. 
• In spite of the further anticipated rebound, with uncertainties relating to the ongoing COVID-19 pandemic, supply chain disruptions and the war in Ukraine, the Central Bank Governor has said that Barbados’ bread and butter tourism industry could be significantly impacted, resulting in less than ideal economic performance.

(Sources: Barbados Today, CBB & NCBCM)

• The president of the Dominican Association of FinTech Companies (AdoFinTech), Miguel Ángel Adames, highlighted today that, between 2017 and 2021, the Dominican Republic was the country with the highest growth in Fintech Startups in the Latin American and Caribbean region, with an increase of 129%, according to data from the Inter-American Development Bank (IDB). 
• Outside of DomRep, financial technology companies have experienced rapid growth throughout Latin America, especially during the pandemic. In addition to helping to reduce the financial inclusion gap in the region, the Fintech sector has been one of the sectors that received the most investment, attracting $125.0Bn globally in 2021. 
• The FinTech sector will provide a vital boost to the Dominican Republic economy and the post-pandemic economic recovery process. A part of this support will come from the 16.4% expected revenue growth in the Digital Investment segment in 2023.

(Source: Dominican Today)

• The U.S. economy unexpectedly contracted in the first quarter amid a resurgence in COVID-19 cases and a drop in pandemic relief money from the government, but the decline in output is misleading as domestic demand remained strong. 
• GDP fell at a 1.4% annualized rate last quarter, the first decrease in GDP since the short and sharp pandemic recession nearly two years ago. As reported by the Commerce Department on Thursday, this was mostly driven by a wider trade deficit as imports surged, and a slowdown in the pace of inventory accumulation. 
• Front-loading by businesses fearful of shortages because of the Russia-Ukraine war contributed to a surge in imports. Exports tumbled, leading to a sharp widening of the trade deficit, which chopped 3.20 percentage points from GDP growth, the most since the third quarter of 2020. Trade has now been a drag on growth for seven straight quarters. Additionally, the economy also took a hit from supply-chain challenges, worker shortages and rampant inflation. 
• Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania noted that the U.S. economy is not anywhere close to recession. He noted that underlying demand remains strong, the labour market is in excellent shape, and that growth will resume in the second quarter.

(Source: Reuters)

• The U.S. solar industry is warning of a big slowdown in project installations this year as global supply chain disruptions and the threat of new U.S. tariffs on panel imports from Southeast Asia hit home. 
• U.S. power company Southern Co (SO.N) on Thursday said nearly a gigawatt of its planned solar energy projects would be delayed by a year, the latest in a string of warnings from companies and industry representatives citing the two issues. 
• A slowdown in the solar industry's growth could pose a threat to the Biden administration's climate goals, which include decarbonizing the U.S. power sector by 2035 through the widespread adoption of wind and solar energy. 
• Earlier this week, the largest solar trade group said it was cutting its solar installation forecasts for this year and next by 46% due to the threat of new tariffs. More than 315 projects are being canceled or delayed, according to the Solar Energy Industries Association. 
• The tariff concerns have added to an array of headaches for U.S. solar developers that include surging costs for components, labour and freight as the global economy recovers from the coronavirus pandemic.

(Source: Reuters)

• Fitch Solutions projects GDP growth in Guyana will reach 46.0% in 2022, from 19.9% in 2021, as the expanding oil sector will fuel a surge in growth. Oil production and exports have underpinned the Guyanese economy since ExxonMobil began production from the Stabroek block in Q4 2019. The first producing project, Liza-1, surpassed production expectations of 104,000 barrels/day (b/d) in 2021, with actual output of 110,000 b/d. 
• It is expected that production from ExxonMobil’s second floating platform project, Liza 2, which came online ahead of schedule in February 2022, will provide additional oil production in the coming months. In turn, higher oil revenues will fund greater government expenditures which will spur growth in the non-oil economy. Elevated oil prices, strong demand for energy and additional exploration offshore will sustain export and investment growth in 2022. 
• Goods exports will grow 61.0% in 2022, as Fitch’s Oil & Gas team recently revised its oil production forecast for Guyana to 234,500 b/d in 2022, from 147,600 b/d previously, due to ExxonMobil’s ability to deliver robust output growth from two existing offshore projects over the coming months. 
• In addition, oil prices will average USD100.0/barrel in 2022 due to the lingering impact of the Russia-Ukraine conflict, incentivising additional domestic production. Finally, upstream investments are expected to remain high over the near term as the ExxonMobil-led consortium continues to prioritise Guyana’s assets in their capital expenditure plans and prices remain elevated.

(Source: Fitch Solutions)

• The European Commission proposed on Wednesday a one-year suspension of import duties on all Ukrainian goods not covered by an existing free trade deal to help the country's economy during the war with Russia. 
• The measures will apply in particular to fruit and vegetables, subject to minimum price requirements, agricultural products facing quotas, and certain industrial goods, tariffs on which were only due to be phased out by the end of 2022. 
• That phase-out, set out in the 2016 EU-Ukraine free trade agreement, applies to fertilisers, aluminium products and cars. 
• The European Union will also exempt Ukraine from safeguard measures that limit steel imports, and lift anti-dumping tariffs the EU currently imposes on Ukrainian steel tubes, hot-rolled flat steel products and ironing boards. 
• Ukrainian President Volodymyr Zelenskiy said he had discussed the proposal with European Commission President Ursula von der Leyen on Wednesday and expressed his gratitude.

(Source: Reuters)

• Global oil prices rose modestly on Wednesday due to ongoing concerns about tight worldwide supply, underscored by another drawdown in U.S. distillate and gasoline inventories. 
• The market rebounded late in the session after losing ground for most of the day, in part due to strength in the dollar and as China grapples with fresh coronavirus outbreaks that are sapping demand. However, Russia's move to cut off gas shipments to two European nations added to overall worries about tight energy supply. 
• Brent crude futures settled up 33 cents to $105.32 a barrel, while U.S. West Texas Intermediate crude settled up 32 cents to $102.02 a barrel. 
• The U.S. Energy Information Administration said crude stocks rose by just 692,000 barrels last week, short of expectations, while distillate inventories, which include diesel and jet fuel, fell to their lowest since May 2008. 
• The drop in distillate stocks helped boost U.S. heating oil futures to an all-time closing record at more than $4.67 a gallon. Refiners process crude into diesel, jet fuel and other products, and U.S. refiners have been running at high rates to meet demand, particularly in Europe, a big user of diesel fuel.

(Source: Reuters)

• The unemployment rate in January 2022 was 6.2% compared to 8.8% for the same quarter in 2021. 
• This rate is below its pre-pandemic level; however, it should be noted that in January 2020, before the start of the current pandemic, while the unemployment rate was 7.3%, there were more employed persons (1,272,700 in January 2020 relative to 1,257,100 in January 2022). There was also an overall larger economically active population (1,372,900) than in January 2022. 
• In January 2022, male employment increased by 28,200 (4.3%) and female by 29,600 (5.5%). The increase in the number of employed males was mainly in the occupation group ‘Craft and Related Trades Workers’ while the increase in female employment was mainly in ‘Clerks’. The increase in employment for males and females was mainly in the industry group ‘Real Estate and Other Business Services.’ 
• The overall improvement in employment levels continues to be driven by the rebound in economic activity and expansion in service sectors such as business process outsourcing. It is also anticipated that the public investment project which will involve the expansion of the North Coast Highway with the construction of an additional two lanes from Seacastles to Mammee Bay, will also create new jobs. That being said, as the gradual recovery continues, we should see a further reduction in the unemployment rate. However, the rate of decline may be impacted by a likely increase in the number of persons seeking jobs.

(Source: STATIN)