• The Bank of Jamaica Governor, Richard Byles, during the panel discussion on digital and cryptocurrency, at the 2022 Jamaica 60 Diaspora Conference on Wednesday (June 15) announced that persons with Central Bank Digital Currency (CBDC) accounts will be able to use them to receive remittances from overseas. 
• He also noted that while individuals sending funds would have to do so using existing arrangements at their respective locations when the money gets here “it can go through JAM-DEX immediately to the beneficiary”. Additionally, visitors to Jamaica who may wish to conduct transactions using CBDC will be accommodated. 
• It is anticipated that this will make the system of transfer even more seamless and immediate. Although there’s a bit of work to be done to get that to happen, the Governor noted that this is where technology and banking laws are eventually going to allow us to go. A more efficient process of remittance transfer should help to boost remittance inflows in the future. 
• The Bank of Jamaica (BOJ) is looking to commence the national rollout of JAM-DEX at the end of June. BOJ’s Director for Payment Systems and Policy, Mario Griffiths, said the Bank is proceeding with the sole qualified financial institution onboarded to issue digital wallets, which are required to access CBDC – National Commercial Bank (NCB). NCB offers JAM-DEX through Lynk, its digital wallet through which persons will be able to complete transactions with another Lynk wallet holder using JAM-DEX at a date to be advised by NCB. 

(Sources: JIS News & NCBCM Research)

• Potential investors/developers who decide to operate within the proposed Caymanas Special Economic Zone (SEZ) in St. Catherine will enjoy tax-free benefits for an extended period. This was disclosed by the Minister of Industry, Investment and Commerce, Senator the Hon. Aubyn Hill to global investor delegates/participants from the World Free Zones Organization’s Annual International Conference and Exhibition (AICE), 2022, being held in Montego Bay from June 13 to 17. 
• Several years ago the World Bank sponsored a feasibility study of this project and concluded that it will be suited for warehousing and logistics, ICT, BPO, robotics, artificial intelligence, furniture, paper products, plastics, repair services, pharmaceuticals, among other such activities. 
• The Government is looking to attract interest in the development of the 650-acre property as it seeks to get the Caymanas SEZ project started. Businesses operating within the zone will get 50 years tax-free benefit and land for lease. Prime Minister, the Most Hon. Andrew Holness, has mandated the Port Authority of Jamaica (PAJ) to get the project started. 
• Senator Hill further informed that the Government will be investing between $40Mn and $60Mn in the property to put in place the necessary utilities, including water and it will also have broadband access. Investors/developers who wish to develop the property will have a negotiated period within which it must be developed. 
• Special economic zones are expected to facilitate rapid economic growth in the country by leveraging tax incentives as a way of attracting foreign investments and technological advancement.

(Source: JIS News)

• The rising energy prices have prompted Antigua and Barbuda Prime Minister Gaston Browne to call out the United States’ trade embargo on Venezuela, saying that the sanctions on Venezuela are also hurting other nations in the Caribbean region. 
• Furthermore, in a bid to curb the rising price of oil, Browne called on the Caribbean Community (CARICOM) to talk to Caracas. Browne believes that the PetroCaribe initiative that Venezuela had since 2005 could be vital for the region to survive the soaring prices of oil. 
• The PetroCaribe energy initiative allows Venezuela to supply crude oil to countries in the Caribbean region at a much cheaper price relative to the current world price of oil in the first 90 days. Countries may pay the remaining price rate for 25 years, with an interest rate of 1% every year. The cost may also be offset through the trading of goods or services. 
• Loosening restrictions on Venezuela would benefit the region greatly by facilitating the trading of crude oil at a cheaper price and shoring up supply, which could help to alleviate the inflation pressures being faced by the Caribbean.

(Source: Caribbean News Now)

• The United Nations Conference on Trade and Development (UNCTAD) says investment flows to the Region reached US$134Bn last year, up from US$88Bn in 2020. 
• According to UNCTAD’s World Investment Report 2022, foreign direct investment (FDI) in Latin America and the Caribbean rebounded from the pandemic-induced slump, growing by 56% to US$134Bn, after plunging 45% in 2020 -- the sharpest decline recorded in developing regions that year. 
• The rebound in 2021 was propelled by a record number of 317 greenfield projects announced in information and communications technologies (ICT) sectors across the region, a 61% jump compared with 2020. 
• FDI to the Caribbean specifically increased by 39% to US$3.8Bn. This rebound was mainly driven by growth in investment flows to the Dominican Republic, the sub-region’s largest recipient of foreign investment, with the country recording a 21% rise in FDI to US$3.1Bn.

(Source: CARICOM TODAY)

• The recession that many Americans fear is coming is not “at all imminent,” Treasury Secretary Janet Yellen said on June 19^th, 2022. Talk of a recession has accelerated this year as inflation remains high and the Federal Reserve takes aggressive steps to counter it. 
• On June 15, 2022, the Fed announced a 75 basis point interest rate hike, its largest since 1994. Fed Chair Jerome Powell also indicated the Federal Open Market Committee’s intent to continue its aggressive path of monetary policy tightening in order to rein in inflation. At the same time, many expect the combination of resilience in consumer spending and job growth to keep the U.S. out of recession. 
• “I expect the economy to slow,” Yellen said, “It’s been growing at a very rapid rate, as the economy, and the labour market, have recovered and we have reached full employment. It’s natural now that we expect a transition to steady and stable growth, but I don’t think a recession is at all inevitable.” 
• Although Yellen seemed optimistic about avoiding recession, the global economy is still facing serious threats in the coming months with the continued war in Ukraine, soaring inflation, and the COVID-19 pandemic. 
• Still, she doesn’t believe a drop-off in consumer spending would be the cause of a recession. Yellen told ABC News that the U.S. labour market is the strongest of the post-war period and predicted that inflation would slow “in the months ahead.”

(Source: CNBC)

• The German government said Monday (June 20) that it remains committed to its goal of phasing out coal as a power source by 2030, despite deepening worries about a cut in Russia’s gas supplies. 
• Russia’s Gazprom announced last week that it was sharply reducing supplies through the Nord Stream 1 pipeline to Germany for what it said were technical reasons. The German government says the move appears to be politically motivated. 
• On Sunday (June 19), Economy Minister Robert Habeck said that Germany will try to compensate for the move by allowing increased burning of coal, a more polluting fossil fuel. Habeck, a member of the Green party, said the move was “bitter” but “simply necessary” to lower gas usage. 
• In the neighbouring Netherlands, the government announced Monday that despite Moscow’s reductions in gas deliveries to parts of Europe, it still plans to close the biggest Dutch natural gas field in 2023 or 2024, but will also allow coal-fired power stations to operate at full capacity again in order to conserve gas that would otherwise be burned to produce electricity. 
• The government had been phasing out the use of coal to generate power by allowing coal-fired power stations to operate only to a maximum of 35% of their capacity in recent years as it aims to transition to sustainable energy to cut greenhouse gas emissions. 
• When asked Monday to what extent the coal exit strategy is now in doubt, a spokesman for Habeck's ministry said that the coal exit in 2030 isn't wobbling at all, and it is more important than ever that it happens in 2030.

(Source: AP News)

• The Jamaican Government is moving to develop Jamaica as a planning supply hub for the local tourism sector and for other tourism-dependent nations in the region. Tourism Minister, Hon. Edmund Bartlett, made the disclosure as he closed the 2022/23 Sectoral debate in the House of Representatives on June 14. 
• The idea of the logistic supply hub for Jamaica and the other Caribbean islands came out of the Tourism Recovery Task Force chaired by Wilfred Baghaloo in 2020 and aims to give Jamaican entities the necessary muscles needed to grow locally, regionally and internationally. 
• As supply chain issues continue to present a challenge for many countries, it is believed that the hub will help to eliminate some of the supply chain uncertainties. The establishment of the supply logistics centre in the free zone is expected to enable the local suppliers to scale up and to be able to respond effectively. 
• This announcement came on the cusp of Jamaica welcoming the first million stop-over visitors for the year on Wednesday (June 15), bringing earnings of US$1.5Bn. Minister of Tourism, Hon. Edmund Bartlett, said that the strong arrival figure is a sign that the industry is on the “cusp of restoring its 2019 levels of arrivals and earnings”, following the disruptions caused by the pandemic. 
• He noted that summer bookings “are pacing ahead of 2019 (pre-pandemic), to be the strongest summer we have ever experienced”. In addition to this, tourism arrivals for 2023 are projected to reach 3.7 million and $3.5Bn in earnings, with 2024 expected to surpass 2019 levels with 4.2 million visitors and $4Bn in revenue. Considering these expectations, the supply hub would help to reduce potential challenges that the sector could face in sourcing goods to meet the rising demand.

(Source: JIS News & Ministry of Tourism)

• The Limners and Bards Limited (LAB) reported an 8.5% year-over-year rise in net profit to J$123.1Mn for its six months ended April 30, 2022. 
• Revenue for the period was $781.7Mn, a 26.3% increase supported by growth in the company’s core business as the effects of the pandemic on the business recede. Revenue from media placement was up $149.6Mn (or 53.4%), while the advertising agency’s was up $16.1Mn (or 71.3%). The overall expansion in revenue was however tempered by a 6.0% decline in funds from production services. Consequently, gross profit and operating profit surged by 35.7% and 26.4%, respectively. 
• Although direct and indirect costs rose by 21.7% and 46.0%, respectively, the gross margin increased by 2.5 percentage point to 35.2%, while the operating profit margin remained stable at 16.5%. 
• It is expected that The LAB will see continued growth and profitability for 2022 as the company repositions to take advantage of opportunities that may arise and to satisfy clients’ digital shift following the pandemic. The company relies heavily on technology and is growing its newest business segment (content) to capitalize further on new opportunities in the marketplace, which should generate revenues. Additionally, management also remains focused on cost containment in light of the high inflationary environment which should support its bottom-line. 
• LAB’s stock price has decreased by 26.6% since the start of the calendar year. The stock closed Friday’s trading session at $2.82 and currently trades at a P/E of 20.1x which is above the Junior Market  Average of 17.4x.

(Sources: JSE and NCBCM Research)

• Fitch Solutions revised its end-2022 interest rate forecast for Brazil to 13.75%, from 13.25% previously, as higher inflation expectations, rising rates globally and fiscal concerns will lead the Banco Central do Brasil (BCB) to extend its hiking cycle through its August 3 meeting. 
• Inflation is expected to moderate towards the end of the year, reaching 8.6% y-o-y from 11.7% in May. It is forecasted that it will remain far above the BCB’s 3.5% target through 2023, ending the year at 4.6%. 
• Inflation is expected to average 5.8% throughout 2022, and end the year at 4.6%. While this remains above the BCB target, it is expected that once a consistent disinflationary trend has been established, expectations will begin to stabilise, allowing the BCB to lower the rate to support economic growth. 
• In fact in 2023, the BCB is expected to begin loosening monetary policy by bringing the policy rate down to 9.75% by the end of the year as inflation eases.

(Source: Fitch Solutions)

• Global commodity inflation, aggravated by the war in Ukraine, threatens to leave 14Mn people in Latin America with challenges accessing food supply, almost 50% more than the current figure, the United Nations World Food Program (WFP) warned yesterday at a press conference. 
• There are currently 9.7Mn people in this situation of food insecurity in 13 countries of the region. However, they are trying to alleviate food shortages with imports from regional producers such as Mexico or Argentina, said the organization’s director for the region, Lola Castro. 
• The region had suffered multiple crises due to climate change and adverse supply chain impacts of the pandemic, which put 17.7Mn people in a situation of food insecurity. By the end of 2021, the figure had dropped to 8.3Mn. 
• However, implications of the current geopolitical issues on food supply are exacerbating the food security issues in the region. Although Russia and Ukraine do not export large quantities of grains and other foodstuffs to the region, the generalized rise in food prices across the global market has severely affected many Latam countries, which in some cases are net importers of these basic goods.

(Source: Dominican Today)