• Trinidad and Tobago's (TT) energy sector showed mixed performance in the first quarter of 2025, with natural gas output declining year-on-year (YoY) even as crude oil production and select petrochemicals recorded gains, according to the Central Bank (CBTT).
• Data from the Ministry of Energy and Energy Industries pointed to a YoY reduction in the production of natural gas (-5.9%) in Q1. Crude oil production improved (6.1%), while the performance of the petrochemical industry was mixed. Expansions in ammonia (4.7%) and urea (12.5%) were countered by a decline in methanol output (-15.3%).
• Oil prices spiked due to concerns about supply disruptions stemming from military conflict in the Middle East. Brent crude prices reached a high of US$76 per barrel but subsequently fell below US$70 per barrel following the announcement of a ceasefire. These prices remained far below the US$85 per barrel price assumption and will likely impede the TT54.012Bn revenue that was set in T&T’s 2024/2025 budget. Financial markets nonetheless remain on edge in a very fluid situation. Higher energy prices and a possible escalation of hostilities pose risks for growth and inflation across the world, although energy exporters could benefit from the terms of trade shock.
• The CBTT also reported that while momentum in the non-energy sector appears to be slowing, overall economic activity remains positive. Indicators monitored by the Central Bank suggest that positive performances in the manufacturing, distribution and finance sectors were somewhat offset by sluggishness in the construction and utilities sectors.
• Inflation has also remained contained during the review period. Headline inflation, as measured by the Central Statistical Office's Consumer Price Index, rose to 1.4% YoY in May 2025 from 0.7% in January 2025. Core inflation (which excludes food prices) rose by 0.7%, while food prices increased by 4.1% in May. Food prices have been driven by higher prices for meat and for imported items such as butter, margarine and edible oils.
• Taking all these factors into account, the Monetary Policy Committee (MPC) agreed to maintain the repo rate at 3.5%,' it stated. The Central Bank stated that its MPC considered the 'uncertain outlook' for global growth and inflation amidst trade policy developments and geopolitical tensions in the Middle East.

(Sources: CBTT, Trinidad Express Newspapers)

• Brazilian private economists still expect the central bank to start cutting interest rates next January, even after policymakers reinforced guidance that borrowing costs will remain steady for a "very prolonged" period to anchor inflation to the target, according to a survey released on Monday, June 30, 2025.
• The central bank's weekly survey shows economists project the benchmark Selic rate to be held at 15% through December, before falling to 14.75% in January.
• Policymakers earlier this month raised the Selic rate by 25 basis points (bps) to its current level, bringing the total amount of tightening to 450bps since September, and signalled a pause at the next meeting in late July. Following the hike, the median forecast in the survey shifted to a 25-basis-point cut in January, with the Selic rate projected to end 2026 at 12.50%. That outlook remained unchanged on Monday.
• The latest survey also showed that the expected inflation rate for 2025 was cut for a fifth straight week to 5.20%, but projections for subsequent years remain unchanged above the 3% official target, which has a 1.5-point tolerance range on either side.
• In recent speeches, central bank Governor Gabriel Galipolo and Guillen reiterated policymakers' commitment to bringing inflation to the 3% target over the "relevant horizon" - the 18-month period influenced by current policy decisions. Policymakers have flagged a rate pause despite projecting inflation to be 3.6% over that horizon. That forecast was based on market expectations that the Selic rate would be held steady at 14.75% until January 2026 - a more dovish path than has materialised. Galipolo and Guillen added that inflation is still expected to converge to the central bank's target under alternative, undisclosed rate paths.

(Source: Reuters)

• Britain's economy grew at its fastest pace in a year in the first three months of 2025 as homebuyers rushed to beat a deadline on property purchases and manufacturers sped up output ahead of U.S. President Donald Trump's higher import tariffs.
• In a bounce that is not expected to be maintained in the rest of 2025, output grew by 0.7%, confirming a preliminary estimate and the fastest quarterly pace since the first three months of 2024, the Office for National Statistics said.
• The jump in economic output in early 2025 contrasted with the growth of just 0.1% in the fourth quarter of 2024. Data suggests that gross domestic product fell by 0.3% in April from March, but the drop was exacerbated by one-off factors.
• Thomas Pugh, chief economist at audit firm RSM UK, said weak consumer spending and hiring figures in recent weeks were likely to be a one-off reaction to a tax increase on employers and Trump's tariffs, many of which have been suspended. "Now that uncertainty has started to recede, consumer confidence is rebounding, and business surveys point to the worst of the labour market pain being behind us," Pugh said.
• Still, the Bank of England (BOE) expects economic growth of about 0.25% in the second quarter of this year. Expectations for the central bank to cut interest rates twice more over the remainder of 2025 is likely to support household spending. However, a renewed rise in energy prices in the event of further conflict in the Middle East could add to the strains on the already slow-growing economy.

(Source: Reuters)

• U.S. consumer spending unexpectedly fell in May as the boost from the pre-emptive buying of goods like motor vehicles ahead of the Trump administration's tariffs faded, while monthly inflation maintained a moderate pace of increase.
• The Commerce Department's report on Friday likely will have no impact on near-term monetary policy as Federal Reserve Chair Jerome Powell told lawmakers this week that the U.S. central bank needed more time to gauge the impact of the import duties on prices before considering a resumption of interest rate cuts.
• Business surveys have suggested tariffs could start driving up prices this summer, a sentiment shared by Powell and most economists. President Donald Trump's sweeping tariffs, which have led businesses and households to front-run imports and goods purchases to avoid higher prices from duties, have muddled the economic picture, and the spending report offers no clarity.
• Consumer spending, which accounts for more than two-thirds of economic activity, dropped 0.1% last month after an unrevised 0.2% gain in April, the Commerce Department's Bureau of Economic Analysis said. That was the second decline in consumer spending this year. Economists polled by Reuters had forecast consumer spending would edge up 0.1%.
• Economists warned it could take time for the tariff-related distortions to wash out of the economic data. Despite the weakness, an imminent collapse in spending is unlikely as wages increased by a solid 0.4% last month.
• Most economists argue price increases have remained moderate because businesses are still selling inventory accumulated before the tariffs went into effect. They expect inflation will start picking up, beginning with consumer price data for June. Still, some of them believe softening demand could make it harder for businesses to pass on tariffs to consumers.

(Source: Reuters)

• Jamaica’s trade deficit for the period January to February 2025 increased by 5.6% to US$1.01Bn when compared to US$961Mn in 2024, according to data from the Statistical Institute of Jamaica (STATIN). The decline was driven by a reduction in exports and a modest increase in spending on imports. Between January and February 2025, Jamaica’s spending on imports totalled US$1.32Bn, up US$24Mn (1.9%), while the country earned approximately US$306.20Mn from exports, down US$29.70Mn (8.8%).
• “Raw Material/Intermediate Goods” and “Consumer Goods”, which rose by 6.2% and 9.9%, respectively, were the primary drivers of the increase in import spending. The 8.8% decline in exports reflected a 41.0% decrease in the value of exports of “Mineral Fuels”.
• The top five import markets during the period were the United States, China, Brazil, Nigeria, and Colombia. Import spending from these countries rose by 9.3% to $855.0Mn, largely due to higher spending on imports of Mineral Fuels.
• For the same period, Jamaica's largest export markets included the United States, Russia, Iceland, Canada, and France. Export revenue from these markets rose by 11.7% to US$233Mn, largely due to higher exports of Crude Materials.
• Given the U.S. administration’s minimum 10% tariff on all trading partners, this policy shift could lead to a decline in total domestic export revenues for Jamaica, as the higher prices that results from the tariff could slow demand. The U.S. is Jamaica's top trading partner, accounting for just over 40% of total goods exports. This drove the trade deficit higher, reversing the decline witnessed in 2024 (-3.0% YoY).
• In terms of the current Middle East Conflict, higher oil prices could dampen trade and growth prospects, which would also negatively impact Jamaica’s trade balance. However, the ceasefire between Israel and Iran and the de-escalation of the conflict, in turn, saw a collapse in oil prices, with Brent Crude trading back around US$69 per barrel (/bbl), and Fitch believes oil prices will remain in the range of US$70–80/bbl.
• That said, the outlook is mixed and is heavily dependent on the event of a re-escalation in tensions. Any sustained move above US$90/bbl would begin to weigh on global activity, while for a surge to US$120–150/bbl, global inflation could rise by 1.2–1.8 percentage points (pp) and global growth could be reduced by at least 0.2–0.3pp, likely tipping the global economy into a mild recession.

(Sources: STATIN, Fitch Connect & NCBCM Research)

• Wisynco Group Limited (WISYNCO), one of Jamaica’s leading manufacturers and distributors of fast-moving consumer goods, has commissioned a new state-of-the-art manufacturing facility, reinforcing its commitment to innovation and local manufacturing, as the company celebrates its 60th anniversary.
• The investment underscores Wisynco’s commitment to driving growth through local manufacturing, operational excellence and continuous product innovation. The new plant features a modern canning line and an integrated brewery, which will significantly expand the company's production capacity and support the launch of new beverage formats and product categories tailored to Jamaican consumers.
• This acquisition forms a critical part of Wisynco's strategic growth agenda and aligns with its vision of becoming the Caribbean's most innovative and customer-centric consumer goods company.
• Chairman William Mahfood highlighted the investment as a sign of confidence in Jamaica's future, while CEO Andrew Mahfood called it a transformative step to meet consumer demands.

(Sources: JSE, RJR News)

• Concerns over tariffs, taxes, and duties often deter companies from adopting nearshoring strategies. However, representatives from the Port of Miami are assuring businesses in Latin America and the Caribbean—including Trinidad and Tobago—that using foreign trade zones can eliminate these fees entirely.
• Sonless Martin, Vice President of Global Trade and Business at Port Miami, explained that goods placed within a foreign trade zone and exported outside of the United States are not subject to US tariffs, duties, or taxes.
• “With all the tariff conversations happening with the various countries, you will not pay any money on tariffs, taxes or duties as long as you place the product within a foreign trade zone and export it outside of the United States. You have no time limit on when you have to export it, as long as you keep it within a foreign trade zone,” said Martin.
• Martin noted that Port Miami oversees foreign trade zone 281 (Miami-Dade County), one of 24 such zones across Florida—four of which are located within the county. The setup process, which includes applications, security checks, and software integration, typically takes between 30 to 60 days, he said.

(Source: Trinidad Express)

• Attorney General Ryan Pinder says the government of the Bahamas is moving to formally establish the National Investment Fund (NIF) by the end of this month, creating an independently governed vehicle to manage and grow public assets on behalf of the Bahamian people.
• Speaking during the 2025/2026 Budget debate in the Senate, Pinder said the NIF will be structured in line with the Santiago Principles^[i], promoting transparency, sound governance, accountability, and prudent investment practices. “We look to have the fund constituted by the end of this month and funded in part from proceeds from the recent bond offering,” he told Senators.
• The fund will be used to support national infrastructure and public development projects, including those tied to the orange and blue economies, while also seeking to maximize underutilized sovereign assets.
• It will back major development priorities such as the redevelopment of Grand Bahama International Airport and Family Island airport, public-private real estate ventures through vehicles like Poinciana SPV Ltd., and critical infrastructure projects, including the Glass Window Bridge.
• Pinder said the fund will also consolidate the government’s equity holdings in private companies such as BTC, Aliv, Cable Bahamas, and the Nassau Cruise Port. Additional components include a Natural Resources Fund to receive royalties and related revenues, and a Blue Economy Fund to capture income from maritime industries and emerging opportunities such as blue carbon credits.

(Source: Eyewiteness News)

^[i] The Santiago Principles are the globally accepted standards for governance, investment and risk management practices for sovereign wealth funds.

• The U.S. economy contracted a bit faster than previously thought in the first quarter amid tepid consumer spending, underscoring the distortions caused by the Trump administration's aggressive tariffs on imported goods.
• Gross domestic product decreased at a downwardly revised 0.5% annualized rate last quarter, the Commerce Department's Bureau of Economic Analysis (BEA) said in its third estimate of GDP. It was previously reported to have dropped to a 0.2% pace. The revision reflected a sharp downgrade to consumer spending, which is now estimated to have increased at only a 0.5% pace instead of the previously reported 1.2% rate.
• The economy grew at a 2.4% rate in the fourth quarter. Domestic demand growth was slashed to a 1.9% rate from the previously reported 2.5% pace. A flood of imports as businesses rushed to bring in goods before President Donald Trump's sweeping tariffs kicked in, accounted for the bulk of the decrease in GDP. Consumer spending also slowed as the boost from pre-emptive buying of goods, especially motor vehicles, ahead of the import duties faded.
• The flow of imports has since subsided, positioning GDP for a sharp rebound in the second quarter. The Atlanta Federal Reserve is forecasting GDP to accelerate at a 3.4% rate this quarter. Given the gyrations from imports, economists cautioned against interpreting the anticipated rebound in GDP as a sign of economic strength. Data on retail sales, housing, and labour markets have suggested economic activity is softening.
• When measured from the income side, the economy grew at an upwardly revised 0.2% rate in the first quarter. Gross domestic income (GDI) was initially estimated to have declined at a 0.2% pace. That reflected an upward revision to corporate profits. Profits from current production with inventory valuation and capital consumption adjustments decreased $90.6 billion in the first quarter, an upward revision of $27.5 billion.
• The average of GDP and GDI, also referred to as gross domestic product and considered a better measure of economic activity, dropped at an upwardly revised 0.1% rate.

(Source: Reuters)

• Bank of England Governor Andrew Bailey said on Thursday that a recent pickup in inflation created more uncertainty about the medium-term picture for price growth, but he also noted signs of a slowdown in the jobs market in Britain.
• Bailey reiterated the central bank's guidance on borrowing costs, saying rates were not on a preset path but were likely to come down gradually. The central bank governor was among the majority of Monetary Policy Committee members who last week voted to keep borrowing costs on hold at 4.25%.
• Investors are betting on the BoE cutting rates in two further quarter-point moves to 3.75% by the end of 2025. Bailey said elevated global uncertainties continued to impact the UK economy, but the direct impact from trade policies on world output could be smaller than initially thought.

(Source: Reuters)