• A handful of hard-right Republican lawmakers said on Monday they would oppose a deal to raise the United States' $31.4 trillion debt ceiling, in a sign that the bipartisan agreement could face a rocky path through Congress before the U.S. runs out of money next week.
• Florida Governor Ron DeSantis, a candidate for the Republican 2024 presidential nomination, said the deal does not do enough to change the fiscal trajectory. "After this deal, our country will still be careening toward bankruptcy," he said on Fox News. Still, backers predicted it would clear Congress before the United States runs out of money to pay its bills, which the Treasury Department says will happen on June 5.
• The 99-page bill would suspend the debt limit through Jan. 1, 2025, allowing lawmakers to set aside the politically risky issue until after the November 2024 presidential election. It would also cap some government spending over the next two years. While some panel members have come out in disagreement with the bill, top congressional Republican Kevin McCarthy states that it will draw on the support of most Republicans who control the House of Representatives.
• Representative Raul Grijalva, a progressive Democrat, spoke out in reference to an element of the bill that would speed up the permitting process for some energy projects. The bill would also claw back unused COVID-19 funds, and stiffen work requirements for food aid programmes for poor Americans. It would shift some funding away from the tax-collecting Internal Revenue Service, though White House officials say that should not undercut enforcement in the near term.
• Republicans have argued that steep spending cuts are necessary to curb the growth of the national debt, which at $31.4 trillion is roughly equal to the annual output of the economy. Interest payments on that debt are projected to eat up a growing share of the budget in the decades to come as an ageing population pushes up health and retirement costs, according to government forecasts.

(Source: Reuters)

• Warmer weather usually boosts restaurant sales, but diners may hold back for the second straight summer as inflation weighs on consumers’ minds — and wallets. “I think operators are still hopeful for a good summer boon in foot traffic and sales, but I think on the consumer side, they’re more hesitant.” said Huy Do, Research and Insights Manager at market research firm Datassential.
• Last year, consumers pulled back on their restaurant visits in May, June and July amid inflation concerns. Salad chain Sweetgreen said its sales slowed after Memorial Day and blamed the trend on a range of factors, including erratic returns to offices and surging summer travel. Chipotle told investors that its sales decelerated starting in late May, citing the broader economy, its new workforce and a return to normal seasonal fluctuations in college towns. And ShakeShack said its June sales disappointed as lower-income consumers visited less frequently.
• Inflation may be easing this year, but prices are still rising, adding to worries about regional bank failures and a potential recession before year-end. According to a University of Michigan consumer survey, U.S. consumer sentiment fell to a six-month low in May, fueled by concerns about the debt limit standoff.
• Roughly a third of consumers surveyed by Datassential plan to dine out less over the next month, and about half plan to maintain their restaurant-spending habits. Despite diners’ caution, restaurants are optimistic that they’ll still see a summer boom. Nearly half of the operators surveyed by Datassential anticipate higher sales or improved traffic this summer season.
• Companies based in the US restaurant Industry may experience less than ideal results this summer as inflation continues to weigh on consumer spending. As a result, consumers may opt to substitute eating out for dining in.

(Source: CNBC)

• For April 2023, output prices for producers in the Mining and Quarrying industry decreased by 1.4%, while for the Manufacturing industry, prices increased by 0.3% as indicated by the Statistical Institute of Jamaica (STATIN).
• The decline in the index for the Mining and Quarrying industry was due mainly to a downward movement in the index for the major group ‘Bauxite Mining & Alumina Processing’. The index for the other major group, ‘Other Mining & Quarrying’ decreased by 0.3%. These decreases were influenced mainly by the appreciation of the Jamaican dollar vis-à-vis the United States of America dollar over the review period.
• For April 2023, the index for the Manufacturing industry increased by 0.3%. The main contributor was an increase of 1.8% in the index for the major group, ‘Refined Petroleum Products’. The highest weighted major group, ‘Food, Beverages & Tobacco’, registered a negligible increase in its index. The industry’s increase was however tempered mainly by declines in the index for the major groups, ‘Chemicals and Chemical Products’ (0.2%) and ‘Rubber & Plastic Products’ (1.0%).
• The negligible increase in the index for the major group ‘Food, Beverages & Tobacco’ was mainly due to the major group, ‘Manufacture of Grain Mills Products, Starches and Starch Products’ and was the only group to register an increase in its index of 0.8%. The indices of all other groups declined. Additionally, the index for the ‘Refined Petroleum Products’ major group increased by 1.8% due to higher prices for some petroleum products.
• For the period April 2022 - April 2023, the index for the Mining & Quarrying industry fell by 5.2%. This decline was attributed to a decrease of 5.5% in the index for the major group 'Bauxite Mining & Alumina Processing’. The point-to-point index for the Manufacturing industry increased by 2.8%. This was mainly due to the increase of 8.1% for the ‘Food, Beverages & Tobacco’ major group. The industry’s movement was however moderated by the 15.1% decline in the index for the major group ‘Refined Petroleum Products
• PPI, which measures the average change over time in selling prices received by domestic producers of goods and services. Despite a slight decrease in the index in April, the decision by OPEC+ to cut oil supply could lead to further increases in prices for producers from increased transport and electricity costs.

(Source: STATIN)

• Fitch Solutions has revised slightly lower its Short-Term Political Risk Index score for Mexico from 62.9 to 61.3 out of 100, and the Long-Term Political Risk Index score from 56.3 to 55.3, reflecting cuts to the policy-making and characteristics of polity subcomponents respectively. 
• These downward revisions come in response to renewed attempts by President Andrés Manuel López Obrador (AMLO) to increase the role that the state plays in what he views as strategically-important economic sectors and to erode checks and balances on executive power.
• While these initiatives have been long-running features of AMLO’s presidency – reflecting his nostalgia for a more state-centred development model, efforts have been noticeably ramped up in recent months. 
• On May 19, AMLO issued a decree announcing that the army would temporarily seize three sections of a railway operated by Ferrosur (a subsidiary of Grupo México) in the state of Veracruz after the government failed to reach a deal with the firm. AMLO has argued that the seizure was necessary to ensure the timely completion of the Interoceanic Corridor that aims to link ports on Mexico’s Atlantic and Pacific coasts. 
• In addition to these direct actions, the government also passed separate reforms in April that will see the military’s presence in the economy continue to expand and play a bigger role in policing Mexico’s airspace.
• AMLO’s latest actions have undeniably resulted in a further deterioration of the investment climate, reflecting increased risks to the security of private property.
• Notwithstanding, the fact that AMLO’s term in office will end in November 2024 (he is constitutionally banned from running again) should help to contain the lasting damage posed by his populist policies which thus led to the downward revision of the risk indices. 

(Source: Fitch Solutions)

• Numerous persons in Guyana are opting for temporary employment despite multiple long-term job openings. This is because people no longer place much value on work; thus, it is crucial to rekindle their understanding of these ideas.
• This was highlighted by President Dr. Irfaan Ali while delivering his address at the Twelfth Subregional International Labour Organisation Meeting of Caribbean Labour Ministers opening at the Guyana Marriot Hotel on Tuesday, May 23.
• Stressing that the labour framework within the Caribbean region needs to be changed, the President said that Guyana has already taken steps to make this happen.
• He voiced that the Government of Guyana is working towards making tertiary education free, expanding the technical vocational education training and building an international hospitality centre training institute.
• He said, “We, the Government of Guyana, are now providing the facilities and the technology for all our teachers to become trained teachers in the next three years, a tremendous, but necessary investment. We are building a framework of benefits and salary that allow us to retain our workers.”
• Emigration makes it difficult for the country to maintain a high intellectual standard and labour force, while potentially dampening productivity per capita and overall economic growth in the long run.
• That said, these efforts should aid in retaining the country’s labour force and reducing brain drain, as with the current global labour challenges that persist, Caribbean countries have now become a “recruitment ground” for more developed states.
• Guyana along with Jamaica and Haiti are the only Caribbean nations in the top 10 rank out of 177 countries on the 2022 edition of the human flight and brain drain index, being ranked in tenth, second and ninth places respectively.

(Source: Guyana Chronicles)

• The number of Americans filing new claims for unemployment benefits increased moderately last week and data for the two weeks prior was revised sharply lower. This was likely due to the fraudulent applications from Massachusetts being stripped out, indicating persistent labour market strength.
• The report from the Labour Department on Thursday, also showed fewer people collecting unemployment checks in mid-May, suggesting that the economy was enjoying another month of strong employment gains and a lower jobless rate. "The worrisome trend of more layoffs just got completely revised away where the labour market isn't loosening up as much as Fed officials and markets had thought," said Christopher Rupkey, chief economist at FWDBONDS in New York.
• Initial claims for state unemployment benefits increased by 4,000 to a seasonally adjusted 229,000 for the week ended May 20 with Economists polled by Reuters having forecasted 245,000 overall claims for the latest week. The low claims align with recent data on retail sales, factory production and business activity that have suggested the economy regained speed at the start of the second quarter.
• Given that the labour market outcomes factor greatly into the Fed’s interest rate decisions, lower-than-expected unemployment claims and stronger business and factory production readings in Q2 could mean more rate hikes are on the horizon. This could increase the possibility of a recession, intensify the banking system issue and contribute to tighter lending conditions in the USA.

(Source: Reuters)

• Germany has slipped into recession as last year’s energy price shock takes its toll on consumer spending. Output in Europe’s largest economy dropped 0.3% in the first three months of the year, following a 0.5% contraction at the end of 2022, official data showed Thursday.
• “The persistence of high price increases continued to be a burden on the German economy at the start of the year,” the office said. “This was particularly reflected in household final consumption expenditure, which was down 1.2% in the first quarter of 2023.”
• Claus Vistesen, chief euro-area economist at Pantheon Macroeconomics, said spending by consumers in the first quarter was crimped by “the shock in energy prices.” European energy prices were already rising when Russia’s invasion of Ukraine in February last year sent them soaring to record highs. Moscow then went on to throttle gas supplies to European countries, prompting Germany to declare an emergency.
• In a sign that Germany’s recession may prove short-lived, timelier survey data showed earlier this week that business activity in the country expanded again in May, despite a sharp downturn in manufacturing. German Chancellor Olaf Scholz described the outlook for the economy as “very good,” pointing to measures his government has taken in recent months to expand renewable energy production and attract foreign workers.
• However, Franziska Palmas, senior Europe economist at Capital Economics, forecast that German output would shrink again in the third and fourth quarters. The German economy is expected to shrink by 0.1% in 2023, according to the latest forecast from the International Monetary Fund.

 (Source: CNN Business)

• The Ministry of Tourism is taking steps to ensure Jamaica realises outturns projected for visitor arrivals and earnings over this year’s summer period, between June and August. Portfolio Minister, Hon. Edmund Bartlett, advised that Jamaica is forecast to welcome approximately 1.2 million visitors and earn some US$1.5 billion during the period, to make it the best summer in the industry’s history.
• He said the projected arrivals represent an 87.5% load factor of the 1.4 million airlift seats already secured, noting that the latter is a 16 percentage points increase over 2019. However, Mr. Bartlett said consequent on “certain negatives” and “headwinds” acknowledged, that could derail the projections, he will be leading a high-powered delegation to Jamaica’s top visitor source market, the United States, beginning the first week of June, for meetings with stakeholder counterparts.
• The Minister was speaking during the official opening of the new Sandals Dunn’s River Hotel in Mammee Bay, St. Ann on May 19. Mr. Bartlett said it is imperative that Jamaica remains proactive and doesn’t allow the industry’s current upward trajectory to taper off, particularly in light of the sacrifices made to revitalize tourism to pre-COVID-19 levels.
• Meanwhile, President of the American Society of Travel Advisors (ASTA), Zane Kerby, said Jamaica’s tourism product continues to be first-rate, noting that the new Sandals Dunn’s River property will add to the country’s allure. He said Jamaica is in a unique position, based on its association with Sandals International Resorts, pointing out that the 18,000 travel advisors who are members of the ASTA see both entities as one.
• He further highlighted that the island remains a top-10 destination for aspirational visits by Americans, citing as the main reasons “proximity, warm hospitality, crystal blue beaches, food, music, culture, and the attractions”.

(Source: JIS News)

• The Bahamas National Statistical Institute (BNSI) in its latest Consumer Price Index (CPI) report for March highlighted that the inflation rate in the country increased by 0.4% when compared to the 0.1% increase between January and February. The BNSI releases monthly reports on the country’s CPI.
• According to the BNSI, the breakout category of furnishing, and household equipment saw an increase of 6.5% when compared to February, while the miscellaneous goods and services category increased by 1.6%. The report further revealed that for March, clothing and footwear saw a decline of 0.9%.
• “On a year-over-year basis, the CPI rose 4% over the same period last year in 2022,” the report said. “The major categories that contributed to this rise included recreation and culture, alcoholic beverages, along with food and non-alcoholic beverages, with increases of 17%, 11% and 8% respectively.”
• The report also revealed that diesel prices were up 12% in March, while gasoline prices declined by 8% compared to the same period in 2022. However, when compared to February 2023, gasoline prices decreased by 9%, while diesel prices declined by only 2% in March.
• The inflation rate that peaked in 2022 (5.4%) has begun to steadily decline, though remaining above the historical average inflation of 2.1% per year (between 2002 and 2022).

(Source: The Nassau Guardian)

• Brazil's finance ministry forecasts a primary budget deficit of 136.2 billion reais ($27.22 billion) this year, compared to 107.6 billion reais projected in March, according to its bi-monthly revenue and expenditure report released on Monday.
• According to the report, this year's budget is 1.7 billion reais over the spending ceiling, indicating the government would need to find additional funds elsewhere.
• While Brazil's target for the 2023 primary deficit sits at 228.1 billion reais, Finance Minister Fernando Haddad has promised to reduce it to a deficit goal of around 100 billion reais, via spending cuts and seeking new revenue streams.
• This comes at a time when the government's proposed fiscal framework targets a zero primary deficit in 2024, followed by a primary surplus equal to 0.5% of GDP in 2025 and 1% of GDP in 2026 as mandated by the country’s new fiscal reform mandate.
• To achieve this goal, the government must balance public accounts by limiting spending to create a new horizon for economic and social development by declining debt while preserving social and investment spending over time.

(Source: Reuters)