• In a move to bolster Jamaica’s developmental landscape, the World Bank Group’s Board of Directors has greenlit a new strategic partnership for the nation for 2024-2027. The newly endorsed Country Partnership Framework emerges as a linchpin in this pursuit, cementing the enduring collaboration between Jamaica and the World Bank.
• With a keen eye on fostering green, resilient, and inclusive development, the plan also aligns with the government’s thrust towards debt reduction and fiscal resilience under three core priorities - amplifying human capital, cultivating higher-quality job opportunities, and fortifying resilience to unforeseen shocks.
• The strategy comes at a pivotal juncture for Jamaica, building on ten years of effective macroeconomic management and fiscal consolidation, and is focused on achieving a higher economic growth rate.
• Over the past decade, Jamaica has made significant strides in reining its public debt, scaling down from a towering 147% of Gross Domestic Product to a more manageable 72.2%. The reduction stands as a testament to the nation’s fiscal discipline and strategic foresight.
• This groundwork laid by Jamaica’s fiscal prudence beckons a new era of productivity enhancement. Embracing technological innovation, nurturing human capital, and fortifying the business ecosystem are earmarked as avenues to propel economic vitality and prosperity.
• Minister of Finance and the Public Service, Dr.Nigel Clarke, underscored the significance of maintaining macroeconomic stability while stoking the flames of economic expansion.

(Source: Caribbean National Weekly)

• The Sangster International Airport (SIA) runway extension is being hailed as a major milestone for Jamaica’s aviation sector, enhancing safety and security, while boosting tourism and trade by attracting more flights, passengers and cargo flows. The extension, which forms part of a US$70 million upgrading programme at the Montego Bay-based airport, has increased the takeoff range from 2662 meters to 3060 meters.
• Minister of Science, Energy, Telecommunications and Transport, Hon. Daryl Vaz, in a speech read by Chairman of the Airports Authority of Jamaica (AAJ), Mark Hart, at the official opening of the enlarged strip on Thursday (May 2), said the airport is now able to accommodate larger aircraft and more flights.
• “SIA plays a critical role in facilitating the transit of more than 85 percent of tourist arrivals to the island. In 2023, the airport alone served over 5.2 million passengers, underlying its vital importance to Jamaica’s tourism and transport sectors,” Mr. Vaz noted.
• He further noted that the runway extension, which includes enhancement of the public road and utility infrastructure, as well as initiatives for shoreline protection and coastal restoration, will strengthen Jamaica’s status and drive economic growth in the resort town.
• Deputy Prime Minister and Minister of National Security, Hon. Dr. Horace Chang, in his remarks at the function, praised SIA as one of the finest airports in the Caribbean. He emphasised the airport’s capacity to absorb long flights and help to maintain Montego Bay as a centre of tourism activities in Jamaica and the Caribbean.
• For his part, Chief Executive Officer (CEO) of MBJ Airports Limited, Shane Munroe, said the runway extension is a “transformative endeavour that signifies a collective commitment to advancing aviation in Jamaica,” while ensuring compliance with the highest standards of the International Civil Aviation Organization. He further noted that the project involved local engineers and contractors, and local materials were utilised in the construction, thus contributing to the nation’s economy and job creation.

• Panama's former security minister Jose Raul Mulino stormed to victory on Sunday, May 5 in a presidential poll dominated by his old boss, the popular ex-leader Ricardo Martinelli, who buttressed his campaign, despite being holed up in Nicaragua's embassy.
• Mulino, 64, was one of the favourites for the presidency after he stepped in to replace Martinelli on the ballot when the former president was barred from running due to a money laundering conviction, which rendered him ineligible.
• With 95.9% of the votes counted and no runoffs, Mulino of the Realizando Metas party (centre-right) had won a simple majority of the vote (34.3%). In the national assembly, with 40.6% of the votes counted so far, the Realizando Metas had also won the largest unified bloc in the body 13 seats (out of 71 seats). The incumbent Partido Revolucionario Democrático (centre-left) won 12 seats. Independents (or undeclared) garnered the most votes with 21 seats.
• While the victory for Mulino was comfortable, he is entering a fraught situation regarding the economy, public finances, and internal politics. Growth is slowing due to sluggish traffic through the Panama Canal, the closure of the Cobre Panamá (3.0% of GDP) copper mine, and a structurally weak construction sector.
•  Meanwhile, slower revenues and persistent deficits in the Social Security Administration will reduce fiscal space for social and capital spending increases, and will likely prompt a push for fiscal reform.
• Finally, Mulino will likely have to balance pleasing his political benefactor, Martinelli, without appearing weak or subordinate in front of his electorate.

(Sources: Reuters and Fitch Solutions)

• A Turkish electricity generation ship with 36 megawatts capacity has arrived at Everton in Region Six to bolster Guyana’s Demerara-Berbice Interconnected System (DBIS) and help mitigate frequent blackouts. The vessel completed its two-week voyage from Cuba and is now preparing to integrate into the national grid.
• Engineers and technical officers from the Guyana Power and Light Company (GPL) are overseeing the final preparations for connecting the ship to the DBIS. Ravindra Jagnandan, the Zone Manager for GPL in Berbice, noted that weather conditions had delayed some preliminary work.
• Once the ship is docked, it will be connected to GPL’s 69-kilovolt network. Further maintenance on transmission lines will follow to facilitate the integration of power from the ship into the grid.
• The vessel is set to be fully operational by May 8, with an expected availability of 96 per cent. It will operate in conjunction with 17 recently acquired generators and six step-up transformers, providing an additional 30 megawatts of power to the grid.
• The Turkish power ship will remain connected to GPL’s network for at least a year as the government undertakes larger projects to enhance power generation, such as the Gas to Shore development in Wales.
• These initiatives are critical steps toward stabilizing Guyana’s electricity supply and meeting the growing demand for reliable energy.

(Source: Caribbean National Weekly)

• Eurozone business activity expanded at its fastest pace in almost a year last month as a resurgence in the bloc's dominant services industry more than offset a deeper downturn in manufacturing, a survey showed on Monday. HCOB's composite Purchasing Managers' Index (PMI) for the currency union, compiled by S&P Global and seen as a good gauge of overall economic health, bounced to 51.7 in April from March's 50.3, surpassing a preliminary 51.4 estimate.
• That was its second month above the 50 mark, separating growth from contraction, and the highest since May last year. "Service providers have now expanded their activity for the third consecutive month, putting an end to the lack of dynamism observed in the second half of last year," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.
• The services PMI leaped to 53.3 from 51.5, above the flash estimate of 52.9 and its highest reading since last May. A sister survey released last week showed factory activity in the eurozone took a turn for the worse in April, highlighting the divergence between the two sectors.
• Overall optimism about the year ahead remained buoyant. The composite future output index dipped only slightly from March's 61.6 - its highest since February 2022 - to 61.6. Suggesting that services firms expect the rebound to continue, they increased headcount at the fastest pace in almost a year, with the employment index climbing to 53.5 from 52.3.
• "Encouragingly, employment has increased at a faster rate, aligning with the uptick in new business and the growth of the order book, which has seen its strongest expansion in eleven months," de la Rubia added.

(Source: Reuters)

• The dream of home ownership has gotten even further away for renters, with higher housing costs and elevated interest rates standing in the way of the American housing dream, according to a New York Federal Reserve survey released Monday.
• The share of renters as of February who possess hopes of “residential mobility,” or the belief from renters that they one day will be able to afford a home, fell to a record low 13.4% in the central bank’s annual housing survey for 2024. That’s down from 15.0% in 2023 and well off the 20.8% series high back in 2014.
• Pessimism about prospects comes amid a confluence of factors conspiring against the likelihood of renters being able to transition to home ownership. For one, some 74.2% of renters viewed obtaining a mortgage as somewhat or very difficult, which the New York Fed said has “deteriorated substantially” from the 66.5% level in 2023 and 63.1% in 2022.
• Moreover, mortgage rates have remained high by historical standards. A 30-year fixed-rate mortgage now carries an average 7.22% borrowing rate, the highest since late November 2023, according to Freddie Mac.
• Housing affordability has improved little, with the median price in February at $388,700, the highest since November, according to the National Association of Realtors. The NAR’s housing affordability index was at 103 in February, down slightly from January but still at elevated levels, with average monthly housing payments at $2,040. Survey respondents expect housing prices to increase 5.1% over the next year, nearly double the 2.6% expected rate in February 2023 and above the pre-pandemic mean of 4.2%.
• Despite prospects for the Fed to cut interest rates before the end of 2024, respondents think mortgage rates are only going to go higher. The outlook for a year from now is that borrowing costs will be 8.7% and 9.7% in three years, both survey records.

(Source: CNBC)

•  Supported by higher revenues and a reduction in the cost of sales, Caribbean Cement Company’s (CCC) net profit grew by 566.7% (or $1.64Bn) to $1.93Bn for the quarter ending March 31, 2024.
• Quarterly revenue rose by 11.9% year-over-year (yoy) to $7.62Bn, primarily driven by the continued strength in domestic demand, and the Company’s capacity to supply the local market.
• Furthermore, the cost of sales for the quarter declined by 27.1% (or $1.49Bn) to $4.01Bn, reflecting normalized operations compared to the prior period, when it incurred significantly higher costs in January and February 2023 due to planned maintenance. In light of the reduction in costs, there was a 28.18 percentage point improvement in gross margin to 47.4% (Q1 2023: 19.2%).
• Overall, operating profit increased by 728.3% (or $2.31Bn) to $2.63Bn as expenses normalized in 2024. In 2023, the company incurred higher costs due to excess inventory items, additional hired manpower, general higher maintenance costs and higher changes in inventories of finished goods and work in progress. Additionally, the company incurred costs to import cement to make up for the reduction in the production of clinker and cement, which usually occurs during planned maintenance.
• Caribbean Cement’s stock price has fallen by 1.5% since the start of the year, closing Wednesday’s trading session at $58.39. At this price, the stock trades at a P/E of 6.9x earnings, which is below the Main Market Energy, Industrials and Materials Sector Average of 9.4x earnings.
• In the near term, CCC continues to work towards expanding its operation. The company recently announced that phase one of its US$40Mn expansion project, which will deliver an increase of up to 30% in production capacity, is progressing towards full completion next year.

(Sources: Company Financials & NCBCM Research)

• Preliminary gross earnings from tourism are estimated at a record US$4.38Bn for the fiscal year 2023/24 as the sector continues its exponential growth. Stopover arrivals are projected at US$2.96Mn, reflecting a 9.4% increase over the previous period, with cruise arrivals expected to reach US$1.34Mn, up by 9% from the previous period in 2022/23.
• Minister of Tourism, Hon. Edmund Bartlett, in announcing the figures as he opened the 2024/25 Sectoral Debate in the House of Representatives on Tuesday (April 30), said that the US$4.38Bn in earnings “is the largest revenue flow from tourism in the history of the tourism industry”.
• “Several of our communities that were reeling from COVID, as a result of this performance, are now bustling centres of commerce and activity again and are providing more jobs,” he noted.
• Mr. Bartlett informed that for the first three months of 2024, Jamaica has already cleared 1.34 million visitors with earnings of US$1.27Bn. The figure includes 788,000 stopovers, which is a 7.4% increase over the first three months of 2023. “Cruise has come back [with] 554,560 [cruise passengers] representing a 16.1% increase over the corresponding three months last year,” he noted.
• Furthermore, Tourism Enhancement Fund collected US$59.2Mn or $9.2Bn in fees last year. These funds are generated through the US$20 fee for incoming airline passengers and the US$2 fee for cruise passengers, directly contributing to the Consolidated Fund.
• The country also earned total direct revenue flows into the consolidated fund of US$345.8Mn or $53.6Bn. “So, that $53.6Bn is directly into the government revenues, but it does not include the many billions that flow from general consumption tax (GCT), because tourism is the most consumption-driven activity on planet Earth. People travel to consume and consume, and at every point of consumption, they pay a tax,” Mr. Bartlett pointed out.

(Source: JIS)

• Mexico's economy posted better-than-expected first-quarter growth versus the previous three months, but lost steam on a yearly basis, preliminary estimates from national statistics agency INEGI showed on Tuesday, April 30.
• Latin America's second-largest economy posted a 0.2% gross domestic product (GDP) quarter-on-quarter expansion in the period, INEGI said, slightly above the 0.0% expected by economists polled by Reuters. The relatively tepid performance was attributed mainly to a downturn in the primary sector, which was partially offset by a rise in services.
• That said, the economy expanded by 1.6% versus a year earlier, slowing from growth of 2.5% posted in the previous quarter and below projected growth of 2.1%.
• Andres Abadia, Chief Latin America Economist at Pantheon Macroeconomics, said the figures confirmed that economic growth continued to decelerate in Q1, influenced by several challenges. "Tighter financial conditions, difficult external conditions — which offset the boost from pre-election support to households — and increased infrastructure spending, were some of the challenges," Abadia noted.
• Despite the slowdown, Mexico's economy has now expanded for the tenth consecutive quarter. However, Abadia added that the growth momentum appears sluggish compared to recent trends.

(Source: Reuters)

• Brazil released vigorous job market figures on Tuesday, April 30, reinforcing views of stronger economic activity at the beginning of this year, but keeping the central bank wary of potential impacts on inflation.
• Both the unemployment rate and formal job creation figures in Latin America's largest economy came in better than expected in their March readings, maintaining a positive trend that has excited the government and spooked policymakers.
• Brazil's jobless rate stood at 7.9% in the January-March period, according to statistics agency IBGE, slightly up from the 7.8% seen in the previous rolling quarter, but still the lowest for a quarter through March since 2014. However, the rate was below the 8.1% expected by analysts polled by Reuters in a period in which unemployment is seasonally higher.
• "Today's data indicate that we might see new adjustments in GDP growth projections as well as concerns about services inflation," Kinitro Capital economist Joao Savignon said. "They continue to portray a tight job market." "Real wages continue to grow at a relatively solid pace, leading to services inflation remaining uncomfortably high," Pantheon Macroeconomics' chief Latin America economist, Andres Abadia, said.
• Brazil's central bank, which is set to make its next monetary policy decision next week, has emphasized that it is closely monitoring the dynamics of income from various surveys to better assess the degree of slack in the labour market and its potential impacts on service sector inflation.
• The central bank has lowered its key borrowing rate by 50 basis points at each of its last six meetings, to 10.75%, and signalled in March another cut of the same magnitude in May. However, Governor Roberto Campos Neto recently said policymakers could no longer provide guidance on policy decisions due to increased uncertainties, with some believing the easing pace may be reduced.

(Source: Reuters)