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Energy Prices, Pandemic Recovery Will Drive Trinidad & Tobago To Strongest Growth Since 2006 Published: 24 March 2021

  • Fitch Solutions has revised its forecast for Trinidad & Tobago’s (T&T) real GDP growth up to 5.3% in 2021, from 4.8% previously and an estimated -6.5% in 2020.
  • The agency’s revision is driven by an improving export outlook, as the global deployment of COVID-19 vaccines boosts energy prices, as well as the limited spread of the virus within T&T, which will permit the gradual normalization of economic activities.
  • However, risks to the agency’s forecast are skewed to the downside, as the country’s slow vaccination timeline leaves the country vulnerable to a surge in domestic COVID-19 cases that would slow the rebound in domestic activity, while the spread of more contagious virus strains could undermine global energy demand.

(Source: Fitch Solutions)

Japan Lowers Exports View, Says Economy Shows Weakness In March Report Published: 24 March 2021

  • Japan's government in March cut its view on exports for the first time in 10 months and said overall economic conditions were still showing weakness due to the coronavirus pandemic.
  • Authorities also urged attention to how the spread of COVID-19 is affecting the Japanese and other economies, days after the end of a state of emergency in the capital, Tokyo, and three neighboring prefectures. "The economy shows some weakness, though it continued picking up amid severe conditions due to the coronavirus," the government said in its economic report for March.
  • Among key economic elements, the government slashed its assessment of exports, a key driver of Japan's trade-reliant economy, for the first time since May, saying they were increasing at a slower pace.
  • Behind the downgrade was a slowdown in car exports, which showed signs of flattening out after manufacturers front-loaded shipments ahead of an expected recovery from the health crisis, especially in the United States, a government official said.
  • Analysts expect Japan's economy to shrink sharply in the current quarter as the emergency that ended on Sunday weighed on business activity and consumer spending.

(Source: Reuters)

Europe Facing Difficult Quarter But ECB Will Do Its Part: ECB's Lane Published: 24 March 2021

  • Europe is facing a difficult second quarter as coronavirus infections rise and governments re-impose lockdown measures, but the European Central Bank will do its part to keep borrowing costs ultra-low, ECB chief economist Philip Lane said on Tuesday.
  • Fearing that rising borrowing costs would derail the recovery, the ECB earlier this month promised to ramp up bond purchases to keep yields low. Figures published on Monday showed its buys of mostly government bonds were already up by half in the week since that decision.
  • "It's going to be a long quarter," Lane told CNBC in an interview, pointing to high and rising COVID-19 infection numbers. "It's a contest between progress and vaccinations and other medical progress versus the near-term challenge of trying to get this virus under control."
  • Vaccination campaigns have been painfully slow across the 19-country eurozone and governments are now extending, and in some cases tightening, lockdown measures well into April, pointing to a further delay in recovery.
  • Lane added that governments, which play a vital role in financing the economy, needed to reflect on the adequacy of their response, particularly in light of the U.S. government's $1.9 trillion stimulus package, which shifted the debate on the issue.


  • European officials are increasingly under fire for what is seen as an underwhelming fiscal response to the crisis, leaving Europe as a top laggard among advanced economies in the recovery.

(Source: Reuters

Fitch Affirms Jamaica’s B+ Rating, Outlook Stable Published: 19 March 2021

  • On March 18, 2020, Fitch Ratings affirmed Jamaica's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B+' and maintained its stable outlook.
  • This rating is supported by World Bank Governance Indicators that are substantially stronger than the 'B' and 'BB' medians, a favorable business climate according to the World Bank Doing Business Survey, moderate inflation, and moderate commodity dependence. These strengths are balanced by vulnerability to external shocks, a high public debt level, and a debt composition that makes the sovereign vulnerable to exchange rate fluctuations.
  • The Stable Outlook is supported by Fitch’s expectation that the public debt level will return to a firm downward path post-pandemic, which is underpinned by political consensus to maintain a high primary surplus, the resilience of external finances, and stronger economic policy institutions.
  • Factors that could lead to positive rating action include a large and sustained decline in government debt/GDP ratio over the medium term; a strengthening of growth prospects without the emergence of macroeconomic or fiscal imbalances; and entrenchment of institutional improvements in the fiscal policy framework that enhances confidence in medium-term economic and fiscal performance.
  • On the other hand, an increase in debt-to-GDP, for example owing to marked depreciation of the Jamaican dollar or revenues failing to recover at expected rates; economic growth below expectations caused, for example, by the tourism industry being affected by a third wave of the pandemic; and an inability to access financing or evidence of distressed financing conditions could lead to a downgrade.

(Source: Fitch Ratings)

Revenue Growth Bolsters The LAB’s Q1 Net Profit Published: 19 March 2021

  • Strong revenue growth continues to bolster The LAB’s bottom-line resulting in a 37.0% (or $18.11Mn) increase in net profit for the 3 months ended January 31, 2021, to $67.02Mn (EPS: $0.07) relative to the same period in the 2019/20 financial year.
  • The company has remained resilient in spite of the challenges of the pandemic and benefited from a rise in its core business. Media placement which was up $21.3Mn (or 16.6%), and production which increased by $72.8Mn (or 92.3%), contributed to a 35.5% (or $93.27Mn) expansion in revenues, which translated into the higher earnings after tax. 
  • The overall effect of robust revenue growth was tempered by a 39.6% (or $68.37Mn) and 29.4% (or $11.97Mn) increase in direct and admin expenses, respectively. Higher staff costs, on account of increased work volume, repairs and maintenance of production equipment, and depreciation and amortization costs were behind the rise in admin expenses. Notably, even with this increase, administrative expenses as a percentage of revenue inched down to 14.9% from15.6% in the same period last year.
  • The LAB should continue to benefit from the gradual recovery in domestic economy and the measures being implemented by the government to improve business creation as well as MSME expansion and competitiveness, which could stimulate increased demand for its services.
  • After increasing by 1.7% to $3.06 during 2020, the company’s stock price has fallen by 5.9% since the start of 2021, closing Thursday’s trading session at $2.88. At this price, the LAB currently trades at a P/E of 16.6x earnings, which is below the Junior Market Average of 24.8x.

(Source: The Lab Financial Statements & NCBCM Research)

Ongoing Energy Boom, Higher Oil Prices Will Narrow Guyana's Current Account Deficit Published: 19 March 2021

  • Booming crude oil production in Guyana will drive significant export growth in the coming years, turning the country’s current account deficit into a surplus in 2023.
  • An improving investment outlook will fuel capital inflows in the short-to-medium term, helping to limit risks to Guyana's external account stability.
  • Fitch Solutions has revised its current account deficit forecasts to 9.1% of GDP in 2021 and 4.9% in 2022, from 17.9% and 8.5% previously, to incorporate more upbeat oil price and export forecasts. 
  • Moreover, as the non-oil sector improves, it will help attract FDI into Guyana’s infrastructure and agriculture sector, two economic priorities outlined by the government. These inflows, combined with a narrowing current account deficit, will help stabilize its external account, which had previously been bolstered by multilateral and bilateral assistance from wealthier countries.

(Source: Fitch Solutions)

Dominican Republic Records Strong Remittance Inflow Published: 19 March 2021

  • The Central Bank reported that remittance inflows during February were equivalent to $761Mn, a 27.6% YoY increase. During the first two months of the year, remittances reached $1.55Bn, up 31.3% YoY.
  • Remittances have remained very robust since last May, on the back of a recovery in economic conditions in the US, the source of more than 84% of inflows to DomRep.
  • More specifically, general unemployment and Latino jobless rates have dropped in the US, while the stimulus measures have benefitted Dominican Republic immigrants who were then able to send money back home.
  • As the US economy continues to recover, there should be more employment for immigrants, which will support a rise in remittance flows to DomRep. This should also bolster domestic consumption of goods and services and augment the expected rebound in economic activities. 

(Source: Oppenheimer & NCBCM Research)

U.N. Body Raises Global Economic Growth Forecast For 2021 To 4.7% Published: 19 March 2021

  • The global economy is set to grow by 4.7% this year thanks to a stronger-than-expected recovery in the United States, a report by the U.N. Conference on Trade and Development (UNCTAD) said on Thursday, revising up its previous forecast of 4.3%.
  • The upwards revision from its previous forecast made last September factors in an expected boost in U.S. consumer spending on the back of progress distributing COVID-19 vaccines and a vast stimulus package, the report said.
  • "The global recovery that began in the third quarter of 2020 is expected to continue through 2021, albeit with a good deal of unevenness and unpredictability, reflecting epidemiological, policy and coordination uncertainties," the report said. Earlier this month, the OECD also revised higher its growth forecast for this year to 5.6 % from 4.2 %.
  • However, the 22-page UNCTAD report called 'Out of the frying pan...into the fire?' said COVID-19 will have lasting economic consequences that will require continued government support. It said the main risk to the global outlook is a "misguided return to austerity".

(Source: Reuters)

ECB’s Lagarde Urges Governments to Roll Out Fiscal Push on Time Published: 19 March 2021


  • European Central Bank President Christine Lagarde said governments must make sure to roll out their historic joint spending plan on time to ensure the region’s recovery from the coronavirus pandemic.
  • The European Union’s 750 billion-euro ($896 billion) recovery fund “should become operational without delay,” Lagarde told lawmakers in the European Parliament. “By brightening economic prospects for firms and households, fiscal policy would also strengthen the transmission of our monetary policy measures.”
  • The president also urged the EU’s member states to finalize their spending plans in the coming weeks. National governments are currently in talks with the European Commission on how to spend the money from the joint fund, and some submissions have been judged inadequate so far. Plans are due by the end of next month with funds to be disbursed in the summer.
  • The euro-zone economy is already lagging behind the U.S. because of its slow vaccine rollout, now complicated even more by the suspension of AstraZeneca Plc’s shot in several member states.

Capital Programmes Worth $1.32Bn to Be Implemented by FCJ Published: 18 March 2021

  • For the fiscal year 2021/22, the Factories Corporation of Jamaica (FCJ), plans to implement capital programs valued at $1.32Bn.
  • Under the program, the focus will be placed on the redevelopment of Garmex Free Zone Phase 1, which will involve the construction of four factory buildings, providing 90,000 square feet of commercial and industrial space; two mini-warehouses totaling 36,000 square feet, along with other infrastructure works.
  • The focus will also be placed on the development of Garmex Free Zone Phase 2. This phase will see the upgrade and improvements of other facilities of the FCJ, to make them more attractive and supportive of micro, small and medium-sized enterprises (MSMEs).
  • Construction of the Morant Bay Urban Development Centre, which will be undertaken via a joint venture agreement with China Harbour Engineering Company, will commence during the year. The Urban Centre will provide 492,000 square feet of office and commercial space and will favorably impact economic development and employment in the parish of St. Thomas.
  • This project will provide existing and new businesses with the industrial space and necessary support facilities required to operate in the special economic zone to take advantage of benefits that will flow to them from working in the zone and make them more competitive externally. The benefits include tax-free rental income, employee tax credits, low corporate income tax, stamp and customs duty exemptions on import goods, among others.
  • This will foster increased economic output and job creation which should enable a stronger recovery of the Jamaican economy.

(Source: JIS & NCBCM Research)