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  China imposes transit curbs for S.Korea, Japan; WHO voices concern over data   Published: 12 January 2023


  • The World Health Organisation said a lack of data was making it challenging to help China manage the risks of a COVID-19 surge over the Lunar New Year holiday, as the world's second-largest economy reopens after three years of isolation. The holiday, known before the pandemic as the world's largest annual migration of people, comes amid an escalating diplomatic spat over COVID curbs that saw Beijing introduce transit curbs for South Korean and Japanese nationals on Wednesday.
  • The virus is spreading unchecked in China after Beijing abruptly began dismantling its previously tight curbs in early December following historic protests. The WHO said it still does not have enough information from China to make a full assessment of the dangers of the surge while China says it has been transparent with its data.
  • China removed quarantine mandates for inbound travellers on Sunday, one of the last vestiges of the world's strictest regime of COVID restrictions. But worries about the scale and impact of the outbreak prompted more than a dozen countries to demand negative COVID test results from people arriving from China. Among them, South Korea and Japan have also limited flights and require tests on arrival, with passengers showing up as positive being sent to quarantine. In South Korea, quarantine is at the traveller's own cost.
  • In response, the Chinese embassies in Seoul and Tokyo said on Tuesday they had suspended issuing short-term visas for travellers to China, with the foreign ministry slamming the testing requirements as "discriminatory."


PanJam Sells Stake In New Castle Company Limited   Published: 12 January 2023


  • PJAM has advised of the sale of its 33.3% stake in New Castle Company Limited (New Castle) effective December 21, 2022. New Castle manufactures and distributes jerk sauces and seasonings, and other condiments under the brands Walkerswood, Busha Browne’s and Jamaica Joe, which it owns.
  • According to Joanna Banks, PanJam’s Chief Executive Officer: “Our investment in New Castle was in line with PanJam’s strategy to take meaningful equity positions in Jamaican companies with strong brands, foreign exchange earning potential, and a global reach. New Castle has certainly carved a niche for itself in the specialty food space. While we expect the company to continue on its growth trajectory, PanJam’s investment objectives have been met.”
  • While the final sale amount was not disclosed, a gain on sale of the shares would result in an extra boost to profit for the financial year ended December 2022. On the other hand, a loss on sale of the shares would negatively impact PJAM’s bottom line.

(Source: JSE)

Icreate To Graduate To The Main Market Of The Jamaica Stock Exchange Published: 12 January 2023

  • iCreate Limited announced its intention to graduate to the Main Market of the Jamaica Stock Exchange in 2023. On December 14, 2022, iCreate issued and listed 641,125,000 new additional ordinary shares on the JSE.
  • In doing so, the Company has increased its subscribed participating voting share capital by $641,125,000.00 upon the conversion of debt worth of $650Mn to equity, which was completed at the conversion rate of One Jamaican Dollar ($1.00) per share.
  • With the recent increase in share capital, iCreate now has a participating voting share capital issue of $765,741,070.00 which has exceeded the $500,000,000.00 threshold prescribed by JSE Junior Market Rules.
  • As a result, iCreate advised its shareholders that the Company will take the necessary steps to apply for listing on the Main Market of the JSE. This move is in keeping with the Company’s vision and the overall goal of becoming a group of Companies through the numerous Merger and Acquisition (M&A) initiatives which will continue into 2023.
  • A move to the Main Market of the JSE would mean that iCreate would no longer benefit from the tax benefit of being listed on the Junior Market of the JSE. Junior Market companies receive a full tax break after the first five years of listing and a 50% tax holiday in years 6 to 10. This has the potential to negatively impact the net income of the company.

(Source: JSE)

Storming of Brazil's Government Buildings Underscores Risks To Social Stability Published: 12 January 2023

  • On January 8, 2023, supporters of former conservative President Jair Bolsonaro broke into the Congress, the Supreme Court and the presidential palace in Brasilia. This happened following the inauguration of left-wing President Luiz Inácio Lula da Silva (Lula) on January 1.
  • The storming of government buildings appears to be a delayed reaction to Lula’s narrow victory on October 30, after which Bolsonaro challenged the results of the presidential run-off election.
  • Notably, Fitch forecasted that protests by Bolsonaro’s supporters have increased the risk of disruptive demonstrations. In the event of persistent and violent protests, the Agency would lower Brazil’s score in its Short-Term Political Risk Index (STPRI), specifically in the ‘social stability’ component score, which is currently 40 out of 100. The overall score stands at 53.3 out of 100.
  • The forced entry by protesters into Brazil’s key federal government buildings reveals serious security breaches and increased risk to social stability as many of Bolsonaro’s supporters do not accept the presidential election outcome.
  • Despite the peaceful transfer of power during the inauguration of President Lula, the violent protests demonstrate the deep polarisation and division that Brazil is facing.

(Source: Fitch Solutions)

Mexico Inflation Below Forecasts In December, Core Inflation Cools Published: 12 January 2023

  • Mexico's headline inflation ended 2022 slightly below analysts' expectations, while core inflation finally appeared to have peaked, data from the national statistics agency showed on Monday Jan. 9.
  • Annual headline inflation in December reached 7.82%, up moderately from 7.80% in November, but still below the record 8.70% reached in August and September.
  • Meanwhile, the core index, which strips out some volatile food and energy prices, hit 8.35% on an annual basis in December, dropping from November's 8.51%, and the first slowdown since its stubborn upwards cycle began. Economists polled by Reuters had expected annual headline inflation to come in at 7.86% and core inflation at 8.36%.
  • Inflation has blown past the Bank of Mexico's target rate of 3%, plus or minus one percentage point, prompting it to increase its key lending rate by 650 basis points to 10.50% during the current hiking cycle, which began in June 2021. The central bank is now considering another interest rate hike at its next monetary policy meeting scheduled for Feb. 9, according to the minutes of its last board meeting.
  • Jason Tuvey, Senior Emerging Markets Economist at Capital Economists, said that the core index data showed progress, and expected the Bank of Mexico to slow the pace of its rate hikes at the next meeting.

(Source: Reuters)

Bank of England's Pill Sees Risk Of Persistent Inflation, Even If Gas Prices Fall   Published: 12 January 2023


  • Bank of England Chief Economist Huw Pill said on Monday that Britain is at risk of persistent inflationary pressure from a tight labour market, even if natural gas prices stabilise or fall, implying further rate rises may be needed. Pill's speech - the first on monetary policy this year by a BoE official - comes as economists and markets speculate about how near the BoE is to the end of its rate-rising cycle.
  • The BoE raised its main interest rate to 3.5% in December, up from 0.1% a year before, and financial markets expect the central bank to raise rates again to 4% at its next policy announcement on Feb. 2. Markets see BoE rates peaking at 4.5% in June, while economists polled by Reuters in December predicted a peak of 4.25% in the second quarter of 2023.
  • Inflation has fallen slightly from a 41-year peak of 11.1% in October, and Britain's economy appears to be entering a shallow recession. Pill said Britain was "starting to see labour market indicators turn" as job vacancies fell from record levels and unemployment, which had been at its lowest since the 1970s, edged higher.
  • The BoE also forecast headline inflation will fall this year as natural gas prices level off. Natural gas prices in Britain, which spiked in response to Russia's invasion of Ukraine last February, have retreated to around the same level as a year ago, but are several times higher than in early 2021.
  • Pill said that even if natural gas prices eased further, that would not guarantee that underlying price pressures would fall enough for inflation to return to its 2% target.

(Source: Reuters

  World Bank warns global economy could easily tip into recession in 2023   Published: 12 January 2023


  • The World Bank slashed its 2023 growth forecasts on Tuesday to levels teetering on the brink of recession for many countries as the impact of central bank rate hikes intensifies, Russia's war in Ukraine continues, and the world's major economic engines sputter. The development lender said it now expected global GDP growth of 1.7% in 2023 -- the slowest pace outside the 2009 and 2020 recessions in nearly three decades. In its previous Global Economic Prospects report, in June 2022, the bank had forecast 2023 global growth at 3.0%
  • The bank said major slowdowns in advanced economies, including sharp cuts to its forecast for both the United States and the eurozone, could foreshadow a new global recession less than three years after the last one. "Given fragile economic conditions, any new adverse development -- such as higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence of the COVID-19 pandemic or escalating geopolitical tensions -- could push the global economy into recession," the bank said in a statement accompanying the report.
  • The bleak outlook will be especially hard on emerging market and developing economies, the World Bank said, as they struggle with heavy debt burdens, weak currencies and income growth, and slowing business investment that is now forecast at a 3.5% annual growth rate over the next two years -- less than half the pace of the past two decades.
  • The World Bank noted that some inflationary pressures started to abate as 2022 drew to a close - with lower energy and commodity prices, but warned that risks of new supply disruptions were high, and elevated core inflation may persist. This could cause central banks to respond by raising policy rates by more than currently expected, worsening the global slowdown.

(Source: Reuters)

Jamaican Economy Grew by 5.9% Q3 2022   Published: 08 January 2023


  • The Jamaican economy grew by 5.9% during Q3 2022 compared to the same 2021 period. This was primarily due to increases in both the Services and Goods Producing Industries of 6.0% and 5.6%, respectively. The performance reflected the continued recovery of the economy from the impact of the COVID-19 pandemic.
  • Growth was recorded in all Services Industries with the Hotels & Restaurants (35.3%), Other Services (13.1%), Transport, Storage & Communication (5.9%), Wholesale & Retail Trade; Repairs; Installation of Machinery & Equipment (5.3%) sub-industries leading the pack.
  • The expansion in the Hotels & Restaurants industry resulted from increased activities in hotels & other short-stay accommodations, restaurants, bars, and canteens, including from foreign nationals, which increased by 49.2% during the period.
  • The increase in the Goods Producing Industries was largely due to higher output levels in Agriculture, Forestry & Fishing (17.0%), and Manufacturing (9.5%). However, the Mining & Quarrying and Construction industries declined by 27.6% and 3.1% respectively. The Agriculture, Forestry & Fishing industry benefited from the continuation of programmes initiated by the Government such as the Production Incentive Programme, aimed specifically at optimizing productivity.
  • Meanwhile, the Planning Institute of Jamaica (PIOJ) is projecting a growth of between 2.5% and 3.5% for the October to December quarter, and between 4% and 5% for the full calendar year. Growth is projected to be between 3.5% to 4.5% for the fiscal year ending March 2023.

(Source: STATIN)

Brazil's Lula Decrees Extension For Tax Exemption On Fuels Published: 08 January 2023

  • Brazil's newly sworn-in President Luiz Inacio Lula da Silva signed a decree on Sunday, Jan. 1, extending for 60 days an exemption for fuels from federal taxes, a measure passed by his predecessor aimed at lowering their cost.
  • The exemption from federal taxes on fuel represents a revenue waiver of 52.9 billion reais per year, and Economy Minister Fernando Haddad had said that it would not be extended, creating a division in the new cabinet.
  • Earlier on Sunday, Senator Jean-Paul Prates, who is expected to be named chief executive of state-run oil company Petrobras, told reporters that an extension of the exemption would go ahead and last 60 days.
  • Prates said the exemption could be resumed by the new government in a "much more comfortable" way. He has said that one option under study was an extension for six months or until the end of the year for tax exemptions on diesel and liquefied petroleum gas.
  • The extension of the tax exemption on fuels should ease inflation pressures for consumers and businesses but could lower revenues collected by the government if the gap is not filled by other taxes. 


(Source: Reuters)

Growth In Trinidad And Tobago To Be Driven By Private Demand, Hydrocarbons In 2023 Published: 08 January 2023

  • Fitch forecasts real GDP growth in Trinidad and Tobago (T&T) will slow to 1.9% in 2023 from an estimated 5.8% in 2022. Growth in 2023 will be driven primarily by private consumption, as well as a continued expansion of hydrocarbon exports.
  • However, private consumption will grow at a slower rate than in 2022 due to a reduction in price subsidies as government fiscal consolidation efforts continue. Additionally, oil and gas prices will moderate from the highs seen in 2022 – though they will remain elevated by historic standards – while tourist arrivals growth cools, contributing to the slower growth rate.
  • Higher oil and gas production will fuel continued export growth in 2023 and the years thereafter. While Fitch expects growth in the hydrocarbons sector will not return to the levels seen in 2022, due to easing oil and gas prices, it is expected that hydrocarbon production and exports will continue contributing to GDP growth moving forward.
  • However, the tourism sector is not expected to drive significant services export growth in 2023, as the post-pandemic tourism rebound will likely continue to lose steam. As of September 2022, arrivals continued to lag behind other Caribbean markets, having only returned to 76.0% of September 2019 levels. Arrivals will see only minimal growth in the coming quarters as key tourism source markets, such as the US (1.8% in 2022 to 0.3% in 2023) and Canada (2.8% to 1.3%), experience slower GDP growth.
  • Risks to the growth forecasts remain slightly to the downside. While Fitch expects that hydrocarbon production and exports will be a major key driver of GDP growth in 2023, there is a risk that energy prices will fall more dramatically than expected due to the global economic slowdown anticipated next year.

(Source: Fitch Solutions)