• The Jamaican economy grew by 6.4% during the first quarter of 2022 when compared to the first quarter of 2021. A respective 8.9% and 0.4% growth in the Services and Goods Producing Industries were the primary drivers of this performance. 
• The easing of COVID-19 containment measures, including the withdrawal of the Disaster Risk Management Order during the period, positively impacted economic activity which supported the expansion in output. 
• All industries within the Services Industries grew: Hotels & Restaurants (107.1%), Wholesale & Retail Trade; Repairs; Installation of Machinery & Equipment (8.8%), Transport, Storage & Communication (8.8%), Other Services (12.4%), Finance & Insurance Services (0.7%), Real Estate, Renting & Business Activities (1.1%), Producers of Government Services (0.4%) and Electricity & Water Supply (1.4%). 
• The performance of the Hotels & Restaurants industry was due to growth in hotels & other short-stay accommodations and restaurants, bars & canteens. The 230.1% increase in foreign national arrivals during the period positively impacted this industry. This sector could see a further improvement in its performance as the Jamaica Tourist Board (JTB) is projecting that the country will welcome approximately 800,000 visitors for the 2022 summer period with destination earnings exceeding US$1.1Bn. 
• Within the Goods Producing Industries, higher output levels were recorded for Agriculture, Forestry & Fishing (8.2%), Manufacturing (4.0%) and Construction (3.5%). However, the Mining & Quarrying industry declined by 60.0%. The Agriculture, Forestry & Fishing industries benefitted from favourable weather conditions which influenced greater output.
• The IMF currently expects the economy to grow by 2.5% this calendar year. This will continue to be supported by a recovery in the tourism sector which is expected to see its strongest summer ever, greater consumer demand for other services, and higher private consumption. However, the high inflation and interest rate environment poses downside risks to this forecast. 

(Source: STATIN & NCBCM Research)

• The Dominican Republic is authoring a strong tourism rebound after hosting more than 2.2Mn visitors in the first four months of 2022. The DR closed the best month of April in the history of the country’s tourism with 736,000 visitors. The rebound comes following the government’s implementation of policies intended to attract visitors following the March 2020 pandemic’s outset such as implementing a state-funded visitor travel insurance. 
• The Dominican Republic expects to host seven million land-based and cruise ship visitors in 2022 said government officials at the recent Dominican Annual Travel Exchange (DATE) conference. 
• Reaching the seven million visitor threshold will bring Dominican Republic travel within close proximity of its pre-pandemic high-water mark of 6.4Mn land-based travelers and 1.1Mn cruise ship visitors in 2019, according to Caribbean Tourism Organization data. 
• In May, Expedia Group reported Dominican Republic summer bookings grew 40% year-over-year compared with 2021. International travelers drove this increase, led by the U.S., DomRep’s primary travel audience, representing 80% of visitors.  The Dominican Republic has launched several projects, from infrastructure improvements in the historic capital city of Santo Domingo to new hotel developments and cruise port expansion in locations across the country. This will further attract and support the rebound and buoyancy of the country’s tourism sector.

(Source: Travel Pulse)

• Guyana and Barbados are currently working out the modalities for the hospitality training of 6,000 Guyanese set to get underway in Barbados. The governments of Guyana and Barbados agreed last year on the training of Guyanese in hospitality, to effectively prepare Guyana for the imminent boom in the tourism sector. 
• Mohamed Irfaan Ali said last year that Barbados has an established world-class hospitality programme that will benefit Guyana. This will assist in fulfilling the need for technical capacity and human resources to manage and work in the many hotels that will be established locally. 
• Meanwhile, Minister Walrond said the establishment of the local Hospitality Training Institute is progressing smoothly, as well as all areas of collaboration with Barbados regarding airlift and joint marketing.

 (Source: Caribbean News Global)

• Chinese businesses ranging from services to manufacturing reported a slowdown in the second quarter from the first, reflecting the impact of the recent lockdown in Shanghai. This statement was made by the U.S.-based China Beige Book, which claims to have conducted more than 4,300 interviews in China in late April and the month ended June 15. 
• “While most high-profile lockdowns were relaxed in May, June data do not show the powerhouse bounce-back most expected,” The analysis found few signs that government stimulus was having much of an effect yet. 
• Shanghai, China’s largest city by gross domestic product, was locked down in April and May. Beijing and other parts of the country also imposed some level of COVID controls to contain mainland China’s worst outbreak of the virus since the pandemic’s initial shock in early 2020. 
• Between the first and second quarters, hiring declined across all manufacturing sectors except for food and beverage processing, according to the China Beige Book report. The employment situation likely won’t start to improve until China stimulates its economy more in the fall, China Beige Book Managing Director Shehzad H. Qazi said on June 29, 2022, on CNBC’s “Squawk Box Asia.”

(Source: CNBC)

• A Federal Reserve tracker of economic growth is pointing to an increased chance that the U.S. economy has entered a recession. Most Wall Street economists have been pointing to an increased chance of negative growth ahead, but figure it won’t come until at least 2023. 
• However, the Atlanta Fed’s GDPNow measure, which tracks economic data in real time and adjusts continuously, sees second-quarter output contracting by 1%. Coupled with the first-quarter’s decline of 1.6%, that would fit the technical definition of recession. 
• “GDPNow has a strong track record, and the closer we get to July 28th’s release [of the initial Q2 GDP estimate] the more accurate it becomes,” wrote Nicholas Colas, co-founder of DataTrek Research. 
• The tracker took a fairly precipitous fall from its last estimate of 0.3% growth on June 27. Data this week showing further weakness in consumer spending and inflation-adjusted domestic investment prompted the cut that put the April-through-June period into negative territory. 
• One big change in the quarter has been rising interest rates. In an effort to curb surging inflation, the Fed has jacked up its benchmark borrowing rate by 1.5 percentage points since March, with more increases likely to come through the remainder of the year and perhaps into 2023. 
• Fed officials have expressed optimism that they’ll be able to tame inflation without sending the economy into recession. However, Chair Jerome Powell at a panel discussion presented by the European Union earlier this week said getting inflation down is the paramount job now.

(Source: Reuters)

• On June 29, 2022, the Bank of Jamaica (BOJ) announced its decision to increase the policy interest rate (the rate offered to deposit-taking institutions on overnight placements with BOJ) by 50 basis points to 5.50% per annum, effective 30 June 2022. This reflects a cumulative increase in the policy rate of 500 bps since October 2021. 
• Although the point-to-point inflation outturn fell in May (10.9%) relative to April (11.8%), core inflation remained elevated and headline inflation is likely to continue to breach the Bank’s target range of 4%-6.0% over the next year owing to global developments and heightened uncertainty. The decision also factored in the US Federal Reserve’s signal of a faster pace of increase in interest rates in the US. 
• The Bank’s current decision will cause liquidity conditions to remain tight and interest rates on bank deposits and loans to rise further, making savings in Jamaican dollars more attractive relative to foreign currency assets and borrowing in Jamaican dollars more expensive. 
• The Bank also decided to continue pursuing other measures to contain Jamaican dollar liquidity expansion and maintain relative stability in the foreign exchange market. Thus far the bank has sold approximately US$552Mn to the foreign exchange market since October 2021 to complementing its policy rate increases. This is more than twice the amount when compared with the previous corresponding period. 
• While inflation is forecasted to rise further over the next two months, the Bank forecasts that the rate will fall in the second half of the year, consistent with consensus forecast for a fall in commodity prices. This means that the public should start to see lower inflation rates each month, beginning in the latter part of the second half of 2022, as long as tensions between Russia and Ukraine do not escalate and inflation among Jamaica’s trading partners falls.

(Source: BOJ)

• The Bank of Jamaica has advised that the phased rollout of JAM-DEX has progressed with the amendments to the Bank of Jamaica Act (BOJA) 2020 being passed into law on June 14, 2022. 
• These amendments designate BOJ as the sole authority to issue Central Bank Digital Currency (CBDC), JAM-DEX, which is now legal tender. With the amendments, all references to “notes and coins” are now expanded and replaced with, “notes, coins and central bank digital currency”.   
• Given these amendments the Bank can now advance the national issuance of CBDC and in that regard, members of the public are encouraged to sign up for a digital wallet which facilitates access to JAM-DEX. Currently, National Commercial Bank offers JAM-DEX through LYNK®, its digital wallet. 
• Other wallet providers are expected to come on board for the distribution of JAM-DEX later this year. JAM-DEX provides a safe, efficient and convenient way to pay for goods and services.

(Source: BOJ)

• Fitch Solutions forecasts that increased tax revenues and oil profits will narrow Colombia’s fiscal deficit to 6.7% of GDP in 2022, from 7.1% in 2021. The 2021 fiscal deficit came in slightly narrower than the forecast of 7.2%, largely due to increased tax collection resulting from above-trend economic growth. 
• High commodity prices, moderate oil production growth, and strong economic activity will bolster fiscal revenue ensuring it outpaces spending growth, particularly as it is expected that President-elect Gustavo Petro will only implement small increases in expenditure in 2022. Revenues are projected to grow by 16.1% in 2022 down from 25.9% in 2021. This increase will be supported by higher corporate taxes as the rate was increased to 35.0% in 2022 from 31.0%. 
• Additionally, Fitch’s Oil & Gas team forecasts Brent crude oil prices will average USD100.0/barrel (/bbl) in 2022 and USD90.0/bbl in 2023, up from USD71.0/bbl in 2021. Coupled with modest increases in oil production in Colombia, this will boost oil royalties and other intakes from the energy sector, which has historically accounted for approximately 20.0% of government revenues. 
• Expenditures will grow 13.5% in 2022, revised up from the previous 9.3% forecast, particularly as President-elect Petro will likely look to deliver on his campaign promises to expand spending on social programmes.
• These factors underpin Fitch’s forecast that fiscal deficit will fall to 6.7% in 2022, and average 5.4% between 2023 and 2026. The average is up from the prior forecast of 4.4% of GDP.

(Source: Fitch Solutions)

• A few years ago Sri Lanka’s economy was growing strongly enough to provide jobs and financial security for most. It’s now in a state of collapse, dependent on aid from India and other countries as its leaders desperately try to negotiate a bailout with the International Monetary Fund. 
• The situation in Sri Lanka is a complete economic breakdown that has left ordinary people struggling to buy food, fuel, and other necessities and has brought political unrest and violence. 
• Sri Lanka’s crisis is largely the result of staggering economic mismanagement combined with the fallout from the pandemic, which along with the 2019 terrorist attacks devastated its important tourism industry. The COVID-19 crisis also disrupted the flow of payments home from Sri Lankans working abroad. 
• Sri Lanka’s foreign exchange reserves plummeted, leaving it unable to pay for imports or defend its beleaguered currency, the rupee. Ordinary Sri Lankans -- especially the poor -- are paying the price, as they have to wait for days for cooking gas and petrol -- in lines that can extend more than 2 kilometers (1.2 miles). 
• Food price inflation is running at 57%, according to government data, and 70% of Sri Lankan households surveyed by UNICEF last month reported cutting back on food consumption. Many families rely on government rice handouts and donations from charities and generous individuals. The crisis is a crushing blow to Sri Lanka’s middle class, estimated to account for 15% to 20% of the country’s urban population.

(Source: AP News)

• Russia’s coal shipments to China have been rising even though overall shipments to China have declined, new data from S&P Global Market Intelligence showed. 
• Russian seaborne coal deliveries to China surged 55% to 6.2Mn tonnes in the first 28 days of June compared to the same period last year, S&P’s Commodities at Sea database showed. In May, Russian seaborne supply to China also rose by 20% year-on-year to 5.5Mn tonnes. 
• Domestic production in China has also been increasing. The latest data from the National Bureau of Statistics of China showed that between January and May, raw coal production rose 10.4% year-on-year to 1.81Bn tonnes, while imports dropped to around 96Mn tonnes — down 13.6% compared to a year ago. 
• “Despite lower demand and higher domestic coal production, China has been buying significantly higher Russian coal since May 2022,” S&P Global Market Intelligence associate director Pranay Shukla said told CNBC. 
• Russia is a major global coal producer and exporter. However, since its invasion of Ukraine, Moscow has been forced to sell coal at a discount after countries like Japan banned Russian imports of the commodity.

(Source: CNBC)