• Preliminary data for January and February 2023 show an increase in visitor arrivals and expenditure, relative to the corresponding period last year. Director General for the Planning Institute of Jamaica (PIOJ), Dr. Wayne Henry, said that stopover arrivals rose by 55.5 per cent to 457,996 visitors for the period.
• Additionally, he reported that cruise passenger arrivals increased to 300,237 from 110 ship calls, up from 49,870 visitors from 41 vessels for the corresponding timeline in 2022.
• He further highlighted that total visitor expenditure increased to US$761.6 million relative to US$276 million in the corresponding period of last year. He was speaking during the PIOJ’s semi-virtual quarterly media briefing on Tuesday (May 30).
• Henry said the ‘Hotels and Restaurants’ subsector of the Services Industry continues to benefit from increased travel, in light of continued growth in Jamaica’s main visitor source markets, coupled with effective marketing strategies. He indicated that the subsector grew by an estimated 30.8 per cent for the January to March 2023 quarter. The out-turn was the largest of the five subsectors under the Services Industry, all of which expanded.
• This enabled the industry to grow by an estimated 3.8 per cent over the March 2023 quarter. Dr. Henry said the ‘Transport, Storage and Communication’ subsector recorded the second highest out-turn of 4.3 per cent, which was partly due to an estimated increase in the ‘Transport and Storage’ component. The growth reflected in the air transport component was credited to increased passenger movements, up 46.5 per cent.
• The Services Industry’s estimated out-turn enabled Jamaica’s economy to grow by approximately 2.7 per cent, according to the PIOJ, despite the Goods Producing Industry contracting by 0.7 per cent.

.(Source: JIS News)

• Lasco Manufacturing Limited (LASM) recorded a net profit of $2.08Bn for the financial year that ended March 31, 2023. This represents a 21.9% yoy increase in profitability.
• Revenues for the year were up by 18.6% yoy to $11.24Bn which was driven by upward price adjustments. Cost of sales grew by 19.3% yoy in response to input cost increases due mainly to supply chain instability and inflationary pressures. As a result of the cost of sales increasing at a faster pace than revenues, the gross margin fell, but slightly from 36.7% in 2022 to 36.3%.
• Administrative Expenses were up 14.5% yoy to $1.32Bn, primarily due to increased staff costs as well as advertising and promotion.
• LASM’s stock price has decreased by 0.95% since the start of the calendar year. The stock closed Thursday’s trading session at $4.18 and currently trades at a P/E of 8.3x which is below the Junior Market Manufacturing Sector Average of 22.3x.
• LASM continues to prioritize organic growth and incremental margin improvements, continued investments in its brands, innovation, and technology. Though price pressures are likely to continue, at least in the medium term, LASM has committed to finding the right balance between price adjustment and savings through operational efficiency and productivity gains.

(Sources: JSE and NCBCM Research)

• Fitch believes that Peru’s political crisis, set off by the impeachment of President Pedro Castillo in December 2022, is at an ebb, and they expect relative stability in the months ahead. 
• After left-wing parties unsuccessfully attempted to impeach President Dina Boluarte on April 4, there is less political will for another impeachment attempt.
• The impeachment vote was regarding Boluarte’s approval of harsher policing methods in response to mass protests, which followed the auto-coup of her predecessor Pedro Castillo.
• Boluarte’s former left-wing allies wanted her impeached, as they accused her of betraying Pedro Castillo’s left-wing ideals, and being out of touch with working farmers from rural areas. Boluarte’s position was saved by right-wing members of Congress, who approved of harsher methods in dealing with protests.
• Fitch has therefore revised Peru’s Short-Term Political Risk Index from 44.4 to 46.9 as social stability has improved in recent months, and Fitch does not see an imminent removal of another executive along with the fact that violent clashes between the government and protesters have been minimal since March.
• That said, risks remain towards greater social instability. Boluarte is still being investigated on corruption charges, while both Boluarte and Congress remain unpopular and the public remains deeply unhappy with the ruling elites.

(Source: Fitch Solutions)

• Trinidad and Tobago and Chile yesterday commenced the fourth round of negotiations for a Partial Scope Trade Agreement between the two countries.
• The fourth round will be held over a period of three consecutive days in Santiago, Chile and will build upon the success of the previous negotiating rounds held.  The First Round, which was held in August 2021, provided a meaningful introduction to the negotiations for both parties, while the Second Round was held in January 2022 and the third in December 2022.
• Negotiations will continue on issues such as market access; legal and institutional issues; sanitary and phytosanitary measures (SPS); rules of origin and origin procedures; trade facilitation; technical barriers to trade (TBT); trade remedies and competition policy.
• Among the benefits anticipated to emerge from the conclusion of the agreement are: lower import duties for locally produced goods entering the Chilean market, and elimination of known non-tariff barriers.
• Trinidad and Tobago also stands to gain from cheaper inputs for the manufacturing sector and more affordable consumer goods from Chile.
• Notably, both sides are also seeking to enhance cooperation in the areas of trade facilitation and electronic trade to facilitate trading online between the countries.

(Source: Trinidad and Tobago Guardian)

• U.S. job openings unexpectedly rose in April and data for the prior month was revised higher, pointing to persistent strength in the labour market that could compel the Federal Reserve to raise interest rates again in June.
• The Job Openings and Labor Turnover Survey, or JOLTS report, from the Labor Department on Wednesday also showed that the number of layoffs declined significantly last month. There were 1.8 job openings for every unemployed person in April, up from 1.7 in March, and well above the 1.0-1.2 range which is considered consistent with a jobs market that is not generating too much inflation.
• Demand has remained resilient despite 500 basis points worth of interest rate increases from the Fed since March 2022, when the U.S. central bank embarked on its fastest monetary policy tightening campaign since the 1980s to tame inflation. The flow of strong data has diminished expectations that the Fed could pause further rate increases next month.
• Despite the strong demand for labour, workers are growing less confident, leading to fewer resignations. The quits rate, viewed as a measure of labour market confidence, fell to 2.4% from 2.5% in March. That aligns with a Conference Board survey on Tuesday that showed the share of people viewing jobs as "plentiful" dropped in May to the lowest level since April 2021.

(Source: Reuters)

• Canada's economy expanded faster than expected in the first quarter and likely accelerated further in April, data showed on Wednesday, increasing the odds for another interest rate hike by the central bank.
• The economy expanded at an annualized rate of 3.1% in the first three months of the year, Statistics Canada said, exceeding both analysts' and the central bank's expectations. Real GDP was unchanged in March from February, better than a forecasted 0.1% decline, and likely rose 0.2% in April, the agency said.
• The next policy announcement is due on June 7. Money markets are pricing in a 40% chance of a hike next week, up from 28% before the data, and they fully expect an increase of 25 basis points by September.
• The economy benefited from favourable international trade and growth in household spending in the quarter that ended March, while slower inventory accumulation, as well as a decline in housing investment, were among moderating factors, Statscan said. Canadian households spent more on new trucks, vans and sport utility vehicles and semi-durables like garments in the quarter, while spending on nondurable goods declined slightly.

(Source: Reuters)

• Individuals could soon be able to move their accounts easily from one bank to another. The Bank of Jamaica (BOJ) is actively developing strategies to make deposit portability a reality locally.
• Deposit portability will give the banked and unbanked the flexibility to shop around at the various banks to find the services that best suit their needs.
• In addition to other features, the dream is that all standing instructions, inclusive of direct debits of credit cards, will remain intact without the complicated account opening procedures or know-your-customer (KYC) hassles.
• Speaking with JIS News, Deputy BOJ Governor, Research and Economic Programming Division and Financial Stability, Robert Stennett, explained that the Central Bank is aware that the initiative is a game changer for banking in Jamaica. He noted that the Central Bank is currently working on strategies that will allow customers to close existing accounts and move their business to another bank easily.
• Stennett however noted that it will be a long-term effort as it will take a lot of time to develop the right strategies and make the necessary amendments to the law.

(Source: JIS News)

• Mexico's central bank on Wednesday signalled it would hold the country's benchmark interest rate at its current all-time high for an extended period of time to bring inflation down to the bank's target range.
• "To achieve orderly and sustained convergence of headline inflation to the 3% target, the bank's governing board considers that it will be necessary to maintain the benchmark rate at its current level for a prolonged period," the Bank of Mexico said in its quarterly economic report.
• The central bank's governing board unanimously held the benchmark interest rate steady at 11.25% on May 18, breaking a nearly two-year rate-hike cycle.

(Source: Reuters)

• With elections a year away, Fitch expects policy continuity will remain stable throughout the remainder of 2023 in the Dominican Republic.
• The approaching election season, coupled with elevated costs of living, are likely to pressure President Luis Abinader to maintain subsidy spending and work towards raising the minimum wage.
• Abinader has also kept in place popular policies, including the fuel subsidy as well as the strict policy of deporting any undocumented Haitian in the Dominican Republic. While there has been some pushback to the latter on humanitarian grounds, the policy remains popular, especially as Dominicans fear the influx of Haitians will put strains on public services.
• Of note, President Abinader has focused on capital projects for improving and modernising the country’s ecotourism, renewable energy sector, as well as transportation infrastructure. His Modern Revolution Party (PRM) will continue to enjoy a majority coalition in Congress, supporting policy continuity. 
• Given these factors, Fitch has maintained the Short-Term Political Risk Index (STPRI) score at 75.2 out of 100. While inflationary pressures continue to subside, the upcoming election cycle and cost of living crisis will pose some risks to social stability in the short term.
• Last week, Central Bank Governor, Valdez Albizu, delivered a speech to the local banking association hinting that inflation could converge to the target range as soon as this month. In April it had come out at 5.15% (down from 9.6% a year before), while the target band is set at 4% +/- 100bp.

(Source: Fitch Solutions)

• The S&P 500 rose Tuesday after the Biden administration and Republican lawmakers reached a tentative deal on raising the U.S. debt ceiling.
• President Joe Biden and House Majority Leader Kevin McCarthy reached an agreement to raise the debt ceiling and avoid a default over the weekend, with Congress set to vote on the legislation as early as Wednesday. Lawmakers have not signaled that they intended to return to Capitol Hill early to work on the deal. Both Republican and Democratic support is needed for the bill agreement to pass.
• “Although the upcoming votes in Congress still pose a small risk, the main risk had been that political pressures would prevent a deal from coming together,” wrote Goldman Sachs economists in a note. “Now that a deal has been reached, it seems very likely to pass both chambers of Congress in the coming week.”
• The agreement comes just days before the so-called “X date” on June 5, which is the earliest date the Treasury Department has signalled the U.S. could default on debt obligations. The initial compromise was first announced on Saturday evening.

(Source: CNBC)