• CariCRIS reaffirmed the Government of Trinidad and Tobago’s sovereign issuer credit ratings at CariAA for both Foreign and Local Currency on its regional rating scale. The ratings indicate that the country’s level of creditworthiness, relative to other rated obligors in the Caribbean, is high.
• CariCRIS maintained a stable outlook, reflecting expectations for broadly maintained macroeconomic stability over the next 12 to 18 months. This is expected to be supported by low but positive real GDP growth, continued financial sector soundness, robustness in Trinidad and Tobago’s sovereign wealth fund, and continued adequacy in international reserves and import cover.
• Key rating strengths include Trinidad and Tobago’s large regional economy, supported by energy and non-energy activities, satisfactory financial sector, monetary and exchange-rate conditions, and strong underlying balance-of-payments characteristics with adequate international reserves.
• These strengths are tempered by fiscal performance that remains closely linked to volatile energy supply and prices, alongside high government expenditure. Persistent social vulnerabilities, worsened by labour-market shocks and crime levels, as well as continued inadequacies in statistical compilations, were also highlighted.
• Positive rating triggers include a reduction in total general government debt to below 65% of GDP over the next 12 months, sustained improvement in the debt service coverage ratio (DSCR) to above 7.00x over two consecutive years, a fiscal surplus above 3% of GDP over two consecutive years, and an increase in import cover to 12 months or more over the next 24 months.
• An increase in total general government debt above 100% of GDP over the next 12 months, a sustained deterioration in debt-servicing capability to below three times, a fiscal deficit above 10% of GDP over two consecutive years, import cover falling to six months or less, or annual economic contraction exceeding 2% over the next two years could result in a rating downgrade.
• The stable outlook reflects CariCRIS’ expectation that Trinidad and Tobago’s external buffers, financial-sector soundness and sovereign wealth fund will continue to support macroeconomic stability, while fiscal performance remains vulnerable to energy-sector volatility and high expenditure.

(Source: CariCRIS)

• Saint Lucia’s geothermal exploration is moving forward, with work now taking place in several communities as the government seeks to determine whether the island can eventually generate electricity from heat beneath the ground.
• According to Physical Development and Public Utilities Minister Keithson Charles, the World Bank-funded project is “quite advanced”. The undertaking remains in the exploration stage, with Saint Lucia seeking to establish whether the underground resource is strong enough to support electricity generation.
• A project implementation team is already in place and consultations have been held with residents and farmers in the affected communities. The next stage will involve civil works, including road construction and expansion and preparation of the well pads where drilling rigs will eventually sit.
• The bidding process is nearing completion, with contractors expected to be brought on board so the project can move into the drilling phase and determine the geothermal resource available.
• The broader goal is to reduce Saint Lucia’s exposure to volatile global fuel prices. Successfully harnessing geothermal energy could help stabilise electricity costs, although this would not necessarily mean cheaper electricity. The government is also considering solar and wind energy as part of its wider push to reduce dependence on imported fuel.
• Progression to the drilling phase will be a key milestone, as it will determine whether Saint Lucia has a geothermal resource strong enough to support electricity generation and potentially provide greater stability in electricity costs.
• Saint Lucia’s geothermal push forms part of a broader effort across the Eastern Caribbean, where several countries, including Dominica, Grenada, Montserrat, St. Kitts and Nevis, and St. Vincent and the Grenadines, are pursuing geothermal projects or exploration at varying stages of development. These initiatives are aimed at reducing dependence on imported fuel and limiting exposure to volatile global energy prices.

(Source: St. Lucia Times)

• Canada's services sector contracted for a fourth consecutive month in September as trade tensions and the war in Iran weighed on demand, exports and business confidence, S&P Global's purchasing managers' index (PMI) showed on October 5, 2026. The deterioration eased from August, but activity remained firmly in contraction territory, underscoring the pressure facing businesses as higher trade barriers and geopolitical uncertainty raise costs and weaken demand.
• S&P Global's Canada Services Business Activity Index climbed to 48.3 in September from 46.8 in August, but remained below the 50 threshold¹ which separates growth from contraction. "September once again proved to be a difficult month for businesses," said Paul Smith, economics director at S&P Global Market Intelligence, noting that both output and new work declined during the month.
• Businesses continued to cite tariffs and the war in Iran as major sources of uncertainty, with the disruptions weighing on export trade while pushing operating costs higher, Smith said. Canada and the United States have imposed successive rounds of counter-tariffs since early 2025, while Washington last week expanded restrictions affecting imports of several Canadian products, including alcoholic beverages, motorcycles and dairy goods.
• Demand remained weak in September. The new business index rose from August but stayed below the 50 mark at 48.5, extending its contraction streak to five months. New export business declined at a faster pace than in August, highlighting the impact of weaker international demand and trade disruptions.
• At the same time, cost pressures intensified. The services-sector input price index increased to 62.2 from 61.7 in August, pointing to a further acceleration in operating expenses. The weak demand and elevated costs leave Canada's services economy facing a difficult backdrop, with businesses contending with the effects of trade restrictions while geopolitical tensions continue to cloud the outlook.

______________________

¹The 50 threshold on the PMI indicates whether business activity is expanding or contracting compared with the previous month. A reading above 50 indicates expansion, while a reading below 50 indicates contraction. A reading of 50 indicates no change in business activity.

(Source: Investing.com)

• United States (U.S.) services sector activity slowed in September, while strong domestic demand stretched supply chains and pushed a measure of prices paid by businesses for inputs to its highest level in more than four years, suggesting inflation could remain elevated into 2027.
• Complaints about higher fuel prices dominated responses to the Institute for Supply Management (ISM) survey published on October 5, 2026. The US-Israeli war with Iran has raised prices of energy and related products and led to shortages of commodities shipped through the Strait of Hormuz. Diesel prices are at record highs, hitting farmers and truckers. Economists have also warned that higher prices could soon spill over to other sectors and broaden inflation pressures.
• The ISM ⁠said its non-manufacturing Purchasing Managers' Index (PMI) fell to a still-high 54.9 last month from 55.4 in August. A reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of US economic activity. Economists polled by Reuters had forecasted that the PMI would be largely unchanged at 55.2. The PMI is at a level consistent with strong economic growth in the third quarter. The economy is being driven by robust domestic demand, mostly consumer spending and business investment in AI and related infrastructure.
• Thirteen services industries reported growth last month, including wholesale trade, utilities, retail trade, information, transportation and warehousing, as well as finance and insurance, accommodation and food services. Among the four industries reporting a contraction were mining and construction.
• But supply chains are struggling to cope, a situation that has been worsened by the conflict in the Middle East. Steve Miller, the chair of the ISM Services Business Survey Committee, said "tariffs and fuel cost impacts were the most cited issues impacting respondents' supply chain," noting that "fuel costs were mentioned twice as often as any other single issue impacting performance."
• The survey's measure of supplier deliveries increased to 53.2 from 51.3 in August. A reading above 50 indicates slower deliveries. That measure has slowed for 22 consecutive months, boosting input prices. Supplier delivery performance was initially affected by tariffs on imports.
• The surveys pointed to higher inflation down the road. Last month, the Federal Reserve raised its benchmark overnight interest rate by 25 basis points to the 3.75%-4.00% range, its first hike in three years, and flagged further increases in borrowing costs ahead. Financial markets were pricing in a roughly 26% chance of a rate increase at the Fed's meeting this month, down from about 71% last week, CME Group's FedWatch tool showed.

(Source: Reuters)

• The Bank of Jamaica (BOJ) will raise its policy rate by a further 50 basis points (bps) to 6.50% at its November 2026 meeting, following the unanimous 50bps hike to 6.00% in September, according to BMI. The tighter policy stance is expected to continue through year-end as elevated inflation pressures risk further unanchoring of inflation expectations and increasing second-round effects. This marks a revision from the research company’s previous expectations that rates would hold through 2026.
• The September rate hike reflected a deterioration in the inflation outlook, with the BOJ seeking to limit the potential spillover of ongoing supply shocks into broader domestic price pressures. Headline inflation remained elevated at 7.9% in August, well above the BOJ’s 4.0%–6.0% target range, while core inflation held at 5.2%. As such, rising inflation expectations and persistent core inflation suggest that second-round effects are beginning to emerge.
• Inflation expectations have also increased, with one-year expectations rising to 7.3% in July from 6.7% in June. Inflation is expected to remain elevated through 2026 and early 2027, as higher global commodity prices, particularly energy prices, continue to feed into domestic costs. Worsening El Niño conditions are also expected to place further pressure on agricultural and food prices, while the effects of Hurricane Melissa continue to weigh on domestic supply.
• The US-Iran conflict remains a key source of uncertainty for Jamaica’s inflation and monetary policy outlook, with oil prices rising above US$100/barrel in September and fuel prices increasing sharply. Diesel prices have risen 53.7%, while transportation inflation accelerated to 14.6% year-over-year (YoY) in August, increasing the risk that higher energy costs become more broadly embedded in domestic prices.
• Overall, the policy rate is projected to end 2026 at 6.50% before easing to 6.00% in 2027, as inflation gradually returns toward the BOJ’s target in the second half of 2027 (H2 2027). However, the trajectory remains highly dependent on the duration of the US-Iran conflict and the resulting impact on global energy prices, with a prolonged conflict presenting upside risks to both inflation and interest rates.

(Sources: BMI, A Fitch Solutions Company & NCBCM Research)

• Jamaica’s trade deficit widened by US$218.9Mn to US$3,103.6Mn for January to June 2026, as higher import expenditure coincided with a decline in export earnings. The export-to-import coverage ratio declined to 20.9%, from 23.5% in the corresponding 2025 period. This implies that the country earned approximately US$0.21 for every US$1.00 spent on imports.
• Total spending on imports for the first six months of 2026 was valued at US$3,921.4Mn, representing a 4.0% increase compared to US$3,770.3Mn recorded in January to June 2025. The increase was mainly driven by higher expenditure on Raw Materials/Intermediate Goods (+4.7%) and Fuels and Lubricants (+6.7%).
• Earnings from total exports were valued at US$817.8Mn, representing a 7.7% decline compared to the US$885.7Mn earned in the corresponding 2025 period. The decline was primarily driven by a 43.0% reduction in the export value of Crude Materials excluding Fuels.
• Jamaica’s top five import trading partners during the period were the United States, China, Colombia, Japan and Trinidad and Tobago. Combined imports from these countries totalled US$2,596.7Mn, representing an 18.3% increase compared to US$2,195.5Mn recorded in the previous corresponding period.
• On the export side, Jamaica’s main markets were the United States, Russian Federation, Netherlands, United Kingdom and Canada. Export revenues from these countries increased by 2.1% to US$595.9Mn.
• Ultimately, the widening trade deficit implied that more foreign currency is leaving the country to finance imports relative to the foreign exchange earned from merchandise exports.

(Sources: STATIN & NCBCM Research)

• On September 28, 2026, S&P affirmed the Commonwealth's long-term foreign and local currency sovereign credit ratings at 'BB-' with a stable outlook and kept its transfer and convertibility assessment at 'BB'. The outlook reflects expectations that the government will remain committed to conservative fiscal policies and manage contingent liabilities from state-owned enterprises (SOEs) without putting its debt trajectory at risk.
• Growth is expected to moderate but remain above potential, supported by cruise tourism and investment across the Family Islands. GDP growth is forecast at 2.5% in 2026, down from 4.2% in 2024 and 3.8% in 2025, with GDP per capita estimated at US$43,000. Tourist arrivals reached 12.5Mn in 2025, up from 11.2Mn in 2024 on the back of strong cruise passenger growth, although S&P noted that the economy remains highly dependent on tourism and that labor constraints weigh on long-term growth.
• Fiscal outcomes have improved, although the rating agency sees surpluses as difficult to achieve without meaningful reform. The reported fiscal deficit was 0.5% of GDP in FY2025 (ended June 30) and 0.9% of GDP in the first three quarters of FY2026, while the government expects to end the fiscal year with a small surplus. Net general government debt is projected at 66% of GDP by end-2026, down from 77.9% in 2020, and interest payments are expected to remain above 15% of revenue for at least the next three years. Refinancing needs remain notable, with 27.4% of government debt maturing within the next year and foreign currency debt accounting for 46.6% of the total.
• External buffers remain adequate, but loss-making SOEs continue to pose risks to public finances. Foreign exchange reserves reached US$3.20Bn as of June 2026, and a renewed fuel hedge with Citibank is expected to offset some of the inflationary pressure, with inflation reaching 4.2% in April 2026. However, S&P cautioned that the government's purchase of the Grand Bahama Power Company Ltd. has increased contingent liabilities and could lead to higher subventions, which already absorb around 14% of total expenditure.
• S&P expects the government to refinance its debt mostly through the domestic banking sector, alongside multilateral and international bank loans, and considers refinancing risks to have abated given the domestic banks' capacity to absorb additional government financing. With US$2.60Bn in external bonds outstanding and the potential for further issuance in international markets, the stable outlook points to limited near-term ratings pressure on Bahamian debt, provided fiscal consolidation stays on track and SOE-related contingent liabilities are contained.

(Source: S&P Global Ratings & NCBCM Research)

• Venezuela's energy sector is moving from regulatory reform toward implementation, as a reworked hydrocarbons framework begins to attract international operators. In January 2026, the country reformed its Organic Hydrocarbons Law, introducing new contractual mechanisms for primary hydrocarbon activities, including Production Participation Contracts (PPCs), under which private companies can assume operational and financial responsibility for projects.
• Eni and GeoPark signed long-term contracts under the new framework in September. Eni agreed a 25-year Hydrocarbon PPC with PDVSA to develop the giant Junín 5 field in the Orinoco Belt as exclusive operator, with responsibility for its technical, financial and commercial management. GeoPark entered the country through a 25-year PPC for the Bare Block, an agreement valued at approximately US$1.20Bn covering more than 15.7 billion barrels of oil originally in place and more than 1,100 existing wells.
• Chevron is also expanding its position in the country. On September 2, 2026, the company announced updated terms for its Venezuelan joint ventures, including additional acreage in the Orinoco Belt and plans to invest more than US$7.00Bn over five years, which it expects to more than double production from its Venezuelan operations to approximately 600,000 barrels per day from 2026 levels.
• The African Energy Chamber (AEC) has also engaged with Venezuelan institutions on investment promotion, technical knowledge transfer and cooperation across the energy value chain.
• Further capital will be needed to unlock the country's resource base. Venezuela holds more than 300 billion barrels of proven oil reserves and more than 195 trillion cubic feet of natural gas. Rehabilitating the sector will require substantial investment in production, infrastructure and refining.

(Source: World Oil)

• Oil prices surged on Thursday, October 1, 2026, after China suspended exports of oil products and reports emerged that the US was preparing to deploy additional military assets to the Middle East. Brent crude settled at US$102.31 per barrel, up 4.37% or US$4.28, while WTI rose 2.71% to US$92.87 per barrel.
• Prices were volatile during the session, falling about 1% in early trading as recovering Gulf crude exports and higher US inventories eased supply concerns. However, the market reversed course following reports that Chinese refiners had suspended oil-product exports beyond Hong Kong and Macau until further notice.
• The move by China added pressure to already tight global fuel markets. Diesel and other refined products remain in short supply following damage to refinery infrastructure in the Gulf and Russia, while Russia has also banned diesel exports through October. China’s restrictions are therefore expected to further constrain global fuel availability.
• Oil prices were also supported by renewed geopolitical concerns after reports that the US was preparing to send a third aircraft carrier and up to 10,000 additional troops to the Middle East. U.S. President Donald Trump said he was still weighing his options regarding Iran, while diplomatic efforts to end the conflict remained subdued.
• At the same time, crude exports from the Gulf have continued to recover. Goldman Sachs estimated that Gulf oil exports reached 23.3Mn barrels per day over the past week, broadly in line with the 2025 average. Saudi Arabia also resumed tanker loadings from Yanbu after restarting its East-West Pipeline.
• Lingering disruptions to oil and refined-product markets have led analysts to raise their average 2026 Brent crude forecast to US$89.05 per barrel, although improving Middle East exports are providing some offset to supply concerns.
• While Gulf crude exports are gradually returning towards normal levels, refined-product markets remain considerably tighter. China’s suspension of fuel exports adds another source of pressure to already constrained diesel and fuel supplies, which could keep energy prices elevated even as crude availability improves.

(Source: Reuters)

• Government borrowing costs across major economies climbed to multi-decade highs on October 1, 2026, as concerns over persistent inflation, further interest-rate increases and rising government debt intensified. The 10-year US Treasury yield reached 5.34%, its highest since 2002.
• The US 10-year yield rose almost 90 basis points during Q3, its largest quarterly increase so far this century. The sell-off has also spread globally, with French 10-year yields reaching their highest since 2002, UK 30-year borrowing costs touching 6% for the first time since 1998, and Japanese yields reaching multi-decade highs.
• Renewed increases in oil prices amid US-Iran tensions have added to inflation concerns and expectations of further monetary tightening. At the same time, investors remain focused on growing government borrowing requirements, with US debt exceeding US$40Tn and debt-to-GDP ratios at or above 100% across most G7^[1]
• Higher government bond yields can feed directly into borrowing costs across the economy, including mortgages, car loans and corporate debt. At the same time, a surge in debt issuance to finance artificial-intelligence (AI) investment is adding to bond supply and placing further upward pressure on yields.
• The bond sell-off reflects more than expectations for central-bank tightening, with persistent inflation, elevated sovereign borrowing and growing corporate debt issuance all contributing to higher yields.

(Source: Reuters)

^[1] The G7 economies comprise Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.