• A US$14-million investment over the next five years to drive a minimum 50 per cent increase in the production of ginger, turmeric and pimento has been announced by Minister of Agriculture, Fisheries and Mining, Hon. Floyd Green.
• Addressing the Rural Agricultural Development Authority (RADA) St. Elizabeth Open Day Agrifest at the Social Development Commission (SDC) complex in Santa Cruz, on June 9, Mr. Green said farmers who are not currently engaged in cultivating the valuable crops have an opportunity to participate in the strategic investment.
• He noted that this is just one of a series of initiatives and investments aimed at enhancing food security as well as paving the way for a prosperous interaction between farmers and buyers.
• This project is poised to enhance Jamaica’s agricultural output and contribute to the growth of the sector and potentially boost the export of the crops.

(Source: JIS News)

• While food inflation is expected to be tempered by the slowdown in international food costs, adverse weather could lead to periodic spikes in domestic agricultural produce prices, the Central Bank has said.
• The Central Bank in its May 2023 Monetary Policy Report, said food inflation slowed over February, March, and April as bread and cereals, vegetable and fruit prices eased. It noted similarly, core inflation decelerated to 4.8%.
• The monetary policy committee outlined that domestic price pressures are anticipated to continue to ease in the short run, however, core inflation may be affected by the path of wage settlements, a gradual recovery of consumer demand, and possible implementation of higher utility rates.
• Energy output in the fourth quarter of 2022 rose on a year-on-year basis, while the Central Bank said available data suggests some sluggishness in non-energy output during that period. Overall energy production was fairly steady in the first quarter of 2023.
• Notably, labour market conditions improved as the unemployment rate fell and labour force participation rose in the fourth quarter of 2022 and the Central Bank highlighted that the financial system liquidity remained ample, supporting expansion in private sector credit.
• Overall, the current local climate in the twin islands will continue to support its momentum throughout 2023, with the sovereign projected to grow by 2.2% for the year, only slightly below its 2022 growth of 2.7%.

(Sources: Trinidad Express Newspapers & Fitch Solutions)

• Fitch forecast that real GDP growth will drop to 2.3% in 2023 in Bermuda, which is down from the previous forecast of 2.8% growth for the year, and down from an estimated 3.0% in 2022.
• Although the tourism sector will be the main growth driver in 2023 after restrictions on arrivals were largely removed in 2022, slowing rates of GDP growth will reflect the impact of base effects, inflation eroding real household incomes and headwinds facing the global financial services sector.
• Recently released data from the Government of Bermuda Department of Statistics showed that real GDP growth came in at 2.4% y-o-y in Q422. This was up from a 2.9% contraction in the previous quarter.
• Growth was mainly driven by a 4.5% y-o-y increase in private consumption, as the labour market benefited from improvements in the tourism sector and the absence of any domestic restrictions to contain the Covid-19 pandemic.
• Net exports and services rose by 5.1% in Q422, owing to recovering receipts from the tourism sector after post-arrival testing requirements for vaccinated travellers were dropped from April 2022 onwards.
• Nonetheless, Fitch sees real GDP growth slowing further to 2.0% in 2024, as further improvements to the tourism sector are offset by longer-term structural impediments to growth, though expecting inflation to slow to 2.8% in 2024 (4.5% projected for 2023) as global commodity price pressures ease.

(Source: Fitch Solutions)

• The Canadian dollar weakened against its U.S. counterpart on Tuesday, giving back some recent gains, as investors worried that a slowdown in China could weigh on the global economy, reducing the demand for commodities like oil, of which Canada is a major producer.
• U.S. crude oil futures settled 1.8% lower at $70.50 a barrel on Tuesday, pressured by forecasts for slower oil demand growth in China and disappointment with the size of cuts in China's key lending rates.
• On Wednesday, the Bank of Canada will release minutes for its policy decision two weeks ago. The BoC hiked its benchmark rate for the first time since January to slow the economy and lower inflation to a target of 2%.
• With China’s post-COVID economic reopening being much slower than expected, this may influence the Canadian economy’s productivity due to softer demand for its commodities. This may cause lower transport and fuel fees to the country. The market's appetite for risk has been dialled back, said Darren Richardson, chief operating officer at Richardson International Currency Exchange Inc. "If China is having problems, that could signal problems in other parts of the globe," Richardson said.

(Source: Reuters)

• The administrators of Project STAR (Social Transformation and Renewal) are seeking to raise $100 million via an Initial Public Offering (IPO), which will be launched on the Jamaica Social Stock Exchange (JSE) on June 22.
• Project STAR is a social and economic transformation initiative created by the Private Sector Organization of Jamaica (PSOJ) in partnership with the Jamaica Constabulary Force (JCF). It focuses on reversing poor social outcomes in beneficiary communities.
• JSE Chairman, Julian Mair, said the prospectus will be available by the end of this week, adding that social shares will be offered at $1 per unit. Mair was speaking during a press briefing at the JCF headquarters in Kingston on Wednesday (June 14) to provide an update on the project’s implementation and outcomes, to date.
• He noted that the minimum threshold will be $500, meaning that you can own as small as 500 shares each denominated at $1.
• Ten communities have been earmarked for interventions under Project STAR over the next five years. The initiative has already been rolled out in several east downtown Kingston communities, as well as Savanna-la-Mar Westmoreland, for seven and three months, respectively, while interventions recently commenced in May Pen, Clarendon.
• Mair advised that investing in Project STAR will not provide investors with financial returns, noting that the dividends will be in the form of transformation and the achievement of the key performance indicators. Project STAR is intended to facilitate the implementation of programmes that will enable target communities to become safer and more resilient with improved social outcomes and reduced levels of violence.

(Source: JIS news)

• Prime Minister, the Most Hon. Andrew Holness, says the Government’s partnership with international financial institutions such as the World Bank and the Inter-American Development Bank (IDB) continues to play a pivotal role in the development of the country.
• He made the remarks during a meeting with the newly appointed President of the World Bank, Ajay Banga and President of the IDB, Ilan Goldfajn, at Jamaica House in St. Andrew on June 14.
• Holness noted that Jamaica, with the assistance of the World Bank, the IDB, and the International Monetary Fund (IMF), has achieved the lowering of the debt-to-gross domestic product (GDP) ratio from close to 150% to approximately 80%.
• The Prime Minister said the country will continue to work with the international financial partners to achieve the various developmental goals. He noted that the country will be looking to work with international financial partners to see how it can navigate the multiple overhanging crises, take advantage of opportunities that will present themselves and continue to deepen the reforms that have been undertaken.
• The World Bank and the IDB, together, have about three-quarter trillion US dollars of assets, indicating their financial strength. However, they are more so known for the unmatched depth of their policy experience, the breadth of their technical resources and their unique ability to convene the private-sector investment that is required in infrastructure, in open, transparent and competitive ways across several sectors. These institutions are therefore key in achieving the social policy that is needed across many sectors – education, social safety net, digitisation and other areas to move the country forward.

(Source: JIS news)

• Fitch forecasts that Latin America will see another year of slowing economic activity in 2023, with growth set to ease to 1.5%. However, this is an upward revision from the previous forecast of 1.1% due to better-than-expected data for the opening quarter of the year. This will result in the region remaining a laggard in the EM space, with only Emerging market countries in Europe set to perform worse.
• While there will be slower growth overall for the region, Fitch has revised up forecasts in almost all of its major markets on the back of better-than-anticipated outturns in Q123. Among its major markets, Peru will experience the highest rate of growth in the region (2.3%), while Argentina and Chile will fall into a contraction with a revised downward forecast of -2.1% and -0.1% respectively.
• Additionally, data in Latin America’s two largest economies – Mexico (GDP growth forecast revised up from 1.8% to 2.2%) and Brazil (GDP growth forecast revised up from 1.2% to 1.7%) – have continued to come in well above expectations in recent months, with growth in the former supported by strength in domestic demand and in the latter by an unusually strong performance for the agricultural sector. 
• Colombia’s economy is also forecast to grow by 2.0% in 2023, an upward revision from 1.1% previously, on the back of private consumption and export growth.
• Risks to Fitch’s regional growth forecasts are mostly to the downside, particularly in terms of inflation. If inflation proves stickier than anticipated (in Peru, Colombia and Argentina in particular), it will continue to eat away at purchasing power and could result in central banks keeping rates higher, weighing on growth.

(Source: Fitch Solutions)

• The Central Bank of Costa Rica (BCCR) announced a 50bps rate cut in its meeting on June 14^th, placing the policy rate at 7%. The latest cut followed the 100bps reduction back in April and was the third consecutive rate cut for a cumulative 200bps in easing since March.
• There were anticipations for another 100bps cut given the sharp decline in both general annual and average inflation, which came in at 0.9% and 2.5% in May respectively. This is a notable decline in annual inflation from the 12% peak in August 2022 and places it below the BCCR’s 3% ±1%. target band.
• The BCCR models inflation to remain below the lower band for the remainder of 2023 and does not rule out negative inter-annual variations. Despite this, the BCCR sees the balance of risks to inflation as being inclined to rise over the medium term and noted that the Board decided to move forward “gradually and prudently” towards a less restrictive monetary stance.
• The 50bps cut will be disappointing to the private sector, with 12 business chambers suggesting a 200bps reduction for this past meeting.
• José Jenkins, president of the Costa Rican Union of Chambers and Associations of the Private Business Sector (Uccaep), urged the rate cuts last week so that the BCCR could “effectively guarantee the internal and external stability of the national currency, in order not to compromise the national productive base, provide confidence to the different economic agents of the country and promote the generation of formal employment".

(Source: Oppenheimer)

• Argentina and the International Monetary Fund (IMF) have a $44 billion dilemma, with the two sides set to meet for crunch talks to revamp the country's huge, wobbling debt deal, the key to avoiding default on billions in looming debt payments. The South American country, a serial defaulter that has struggled for years with inflation and currency crises, struck a $57 billion loan deal with the IMF in 2018, which failed and was replaced last year with a new $44 billion programme.
• With net foreign currency reserves estimated to be in negative territory, hit by a major drought that sunk the key soy and corn harvests, Argentina is at risk again of missing debt repayments, with $2.7 billion due to the fund this month alone.
• Economy Minister Sergio Massa is expected in Washington as early as this week to try to unlock talks to accelerate IMF disbursements and ease economic targets attached to the deal, with investors and traders watching closely.
• In a sign of potential holds-ups, an economy ministry source said on Friday that Massa's trip, previously briefed to happen in the next few days, could be delayed depending on how virtual talks progressed. "Until everything is sealed, no one travels. When everything is ready, they'll travel to put things on paper. And when everything is written, Massa will travel," the source said.
• On the streets of Buenos Aires pressure is rising. Inflation has hit 114%, hurting salaries and spending power, reserves have tumbled and one in four people is in poverty, with many blaming - not for the first time - austerity linked to the IMF.

(Source: Reuters)

• The International Monetary Fund (IMF) is working on a platform for central bank digital currencies (CDBCs) to enable transactions between countries, IMF Managing Director Kristalina Georgieva said on Monday.
• The IMF wants central banks to agree on a common regulatory framework for digital currencies that will allow global interoperability. Failure to agree on a common platform would create a vacuum that would likely be filled by cryptocurrencies, she said.
• Already 114 central banks are at some stage of CBDC exploration, "with about 10 already crossing the finish line", she said. "If countries develop CDBCs only for domestic deployment we are underutilizing their capacity," she added. CBDCs could also help promote financial inclusion and make remittances cheaper, she said, noting that the average cost of money transfers stands at around $44 billion annually.
• Georgieva stressed that CBDCs should be backed by assets and added that cryptocurrencies are an investment opportunity when backed by assets, but when they are not they are a “speculative investment”.

(Source: Reuters)